He notes that the Russian deputy finance minister stated that the yen had been over valued while the BOE’s King cautioned that the recent G7 statement should be taken at face value. Elsewhere, Ng notes that Canadian Finance Minister Flaherty also indicated that the G7 statement was not meant to single out Japan. In addition, the ECB’s Nowotny noted late Wed that there was no need to act on currencies.
Looking at price action, Ng notes that GBP was a stark under performer after the BOE’s King warned of a protracted recovery while also adding that the MPC was prepared to undertake more stimulus measures if needed. On other fronts, he notes that the antipodeans regained some ground against the dollar on cited short covering. On other fronts, the SEK jumped after the Riksbank kept its benchmark rate unchanged at 1.00%, in contrast to prior expectations for a cut. Looking ahead, Ng writes, “Going ahead, markets may continue to bounce around in recent ranges with investors also not expecting the BOJ to radically depart from its current stance. Expect markets to continue to focus its energies instead on the probable replacement for governor Shirikawa and the implications for monetary policy.”