JPY: BoJ upgrades outlook but Yen reaction muted – ING
|Despite the Bank of Japan (BoJ) revising up growth and inflation forecasts, political and fiscal risks are dominating yen dynamics and muting the usual USD/JPY response, ING's FX analyst Chris Turner notes.
Japan politics overshadow monetary policy signals
"On another day, today's Bank of Japan meeting might have sent USD/JPY a little lower. Growth and inflation forecasts were revised up and the BoJ seemed to be showing concerns about potential labour shortages and what it could mean for wages."
"However, the political/fiscal story is dominating in Japan. Were PM Sanae Takaichi to prove successful in securing an LDP majority in elections on 8 February, JGB yields would rise again and the yen would be hit on fiscal concerns."
"We've got a slightly bullish USD/JPY bias into that election event risk – especially should US activity data continue to perform well."
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.