Although the Federal Reserve is usually the more closely watched Central Bank by financial market participants, with a building consensus that interest rates are likely to remain steady, the focus has firmly shifted to the Bank of Japan where the outcome is less certain. Analyst forecasts for the BoJ's next move vary widely. While a majority expect a rate cut deeper into negative territory, some say Governor Haruhiko Kuroda may instead decide to change the size and make-up of the Central Bank’s asset purchases program by “twisting” the maturities. Furthermore, the BoJ’s propensity to surprise financial markets has created further uncertainty, with most investors deciding to stay on the sidelines until the event has passed. US markets closed Monday flat, while those in Asia are marginally lower in early Tuesday trade as USDJPY continues to consolidate and move lower ahead of the announcement on policy.
Bank of Japan Takes Center Stage
Daily Analysis - 20/09/2016