BoJ Preview: USD/JPY to accelerate the decline on efforts to stimulate the economic recovery
|The Bank of Japan (BoJ) is set to hold monetary policy steady and downgrade economic forecasts. In addition, the central bank could throw hints on further easing in December. USD/JPY will continue with its downtrend after the BoJ decision, according to FXStreet’s Dhwani Mehta.
See – Bank of Japan Preview: Five major banks expectations
Key quotes
“The BoJ board members are expected to keep rates unchanged at -10bps while maintaining a 10yr JGB yield target at 0.00%. However, the bank is seen extending the deadline for two virus-linked funding programs and enlarged asset purchases at the meeting.”
“Alongside the policy announcement, the central bank is seen downgrading this fiscal year's economic and inflation outlooks in its quarterly assessment report. Although the outlook reviews are already priced-in by the markets, any hints on additional monetary policy easing in December, by way of fresh quantitative easing (QE), could have a significant impact on the yen.”
“The immediate support of the three-month-old descending trendline, seen at 103.87, could be put at risk on any policy efforts by BoJ to boost the economic rebound.”
“If the announcement turns out to be a non-event, investors could use it as an excuse to embark upon a corrective pullback towards the 105.00 level, above which the next resistance awaits at the 21-daily moving average (DMA) hurdle of 105.27.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.