BoJ Keeps Policy On Hold

Industrial production in the Eurozone recorded steady growth of 0.60%, up from the declines of -0.30% in the prior month, bolstered in part by the weakening of the Euro over the past year. The uptick in monthly industrial production which managed to beat estimates of 0.30% comes after two-straight months of declines, but remains below the March highs of 1.10%. EURUSD was little changed on the data although biased to the downside with the currency posting -0.14% losses yesterday. Focus will now shift to the French CPI and the Eurozone and German ZEW economic sentiment figures due out. Median estimates point to a possible decline in the ZEW economic sentiment both for Germany and the Eurozone, so a potential beat on the estimates could keep the Euro well supported against the Greenback in the near-term.

The Bank of Japan held its monthly monetary policy meeting today and as widely expected, the Central Bank left monetary policy unchanged with the current pace of asset purchases at JPY 80 trillion. The central bank echoed the same tune from the previous meeting that the Japanese economy was seen to be recovering modestly and that the bank's Quantitative and Qualititative Easing program was having the desired impact. The Bank's decision, although widely expected, was a close call as various BoJ members were keen to see the Central Bank expand its balance sheet further in-line with expectations from traders. The market view however was for the BoJ to keep its policy unchanged at this meeting and instead consider adjustments in the October meeting. The Yen was seen trading firm with USDJPY trading near 120.07 after previously testing session highs of 120.65.