The market was a little confused about the BOJ’s tweak in policy and after some fluctuation in the yen, the USDJPY pair eventually moved higher to 111.45 in early European trading.
Bank of Japan makes policy adjustments
Daily Analysis - 31/07/2018
Daily Analysis - 31/07/2018
The Bank of Japan concluded a two-day policy meeting today. There was much anticipation from the markets which expected the bank to make tweaks to its currency monetary policy. The yen was sold off soon after the announcement early this morning as the market was underwhelmed. The underlying feeling was there would be more of a specific announcement, whether that would be numerical, a date. The BOJ pledged to keep interest rates extremely low for an extended period. BOJ's policy announcement to make its massive stimulus program more flexible provided some relief to bond investors.
The market was a little confused about the BOJ’s tweak in policy and after some fluctuation in the yen, the USDJPY pair eventually moved higher to 111.45 in early European trading.
The Federal Reserve and the Bank of England are next up for policy meetings. The FOMC stats its two-day meeting today but the market expects the Fed to keep rates unchanged. So the main focus will be on Thursday’s BOE announcement and it is seen to be raising its benchmark interest rate to 0.75 percent from 0.50. GBPUSD has been edging higher slowly to rise above the key $1.31 level this week.
WTI oil prices found strong resistance at the $70 a barrel area and fell back today. Some news may also have contributed to a profit-taking opportunity. On Monday, US President Donald Trump appeared to soften his approach to Iran and the sanctions imposed by the US, saying he would meet with Iranian President Hassan Rouhani without any preconditions.