Bank of Japan Front and Centre through trade on Friday

AUD / USD

Expected Range: 0.7420 – 0.7580

The Australian dollar enjoyed a mixed session through trade on Thursday clinging to moves above 0.75. With little domestic data to steer direction the AUD found support on suggestions the Bank of Japan would fail to deliver an aggressive stimulus package, bolstering demand for Yen and dragging the AUD higher as investor’s minimised USD holdings. Having touched intraday highs at 0.7549 the AUD turned lower as profit taking formed on approaches toward 0.7550 and suggestions the BoJ is in fact preparing specific steps to expand is monetary stimulus approach pushed investors back toward the world’s base currency. Attentions today will lies squarely with the Bank of Japan with volatility expected following its monetary policy announcement and subsequent press conference.  

NZD / USD

Expected Range: 0.6930 – 0.7180

The New Zealand dollar crept higher through trade on Thursday consolidating gains earned on moves beyond 0.70. The Kiwi found support in early trade on rumours the Bank of Japan would fail to deliver an aggressive stimulus package and touched intraday highs at 0.7121. Suggestions Kuroda and the Bank of Japan were in fact preparing specific stimulus measures then forced the Yen lower and encouraged a Greenback rally pushing the NZD lower into the close. The dollar opens this morning buying 0.7077 U.S cents as attentions turn to a benchmark Bank of Japan policy announcement and a raft of key macroeconomic indicators. 

GBP / AUD

Expected Range: 1.7350 – 1.7750

The Great British Pound moved lower through trade on Thursday creeping back below 1.32 as markets chased the Greenback higher on expectations of aggressive Bank of Japan stimulus measures. Despite a stronger than expected upturn in House Prices the GBP touched intraday lows at 1.3121 and struggled to break higher through the rest of the daily session. Attentions today turn a series of middle level macroeconomic indicators for domestic direction while the primary focus across all markets is the BoJ press conference and monetary policy statement.

USD, EUR, JPY

The Greenback moved higher through trade on Thursday recouping losses suffered against the Japanese Yen and holding onto gains enjoyed against the Euro as investors position themselves ahead of a benchmark BoJ Monetary Policy announcement. Investors initially forced the USD lower against is safe haven counterpart, the Japanese Yen, on expectations the Bank of Japan would disappoint and fail to deliver the aggressive stimulus package the market is chasing.  Having touched intraday lows of 104.54 the USD then rebounded on reports the BoJ was preparing specific measures for the extension of monetary stimulus. Expectations of additional stimulus have dominated direction over the last 2 weeks and the USD/JPY has ebbed and flowed on shifting market expectations. The pressure remains with the BoJ to deliver a significant stimulus injection following Prime Minister Abe’s fiscal promise and the markets push for greater cooperation across monetary and fiscal economic reflation efforts. The BoJ has historical shunned market expectations and marched to its own drum consistently disappointing investors so there remains a risk the BoJ will under deliver forcing the Yen higher and the USD through recent lows. Attentions are squarely focused on bank president Kuroda and the BoJ as the driving force governing direction through trade on Friday with a periphery focus on European Banking stress tests and US quarterly GDP numbers.