Published at 03:16 (GMT) 05 Mar
BoJ dissenter Takahide Kiuchi says appropriate level for inflation of Japan is now lower than BoJ's current 2% target. If BoJ strengthens monetary policy easing execessively to push up prices in short period of the time, it will threaten economic, price stability.
Should make timeframe for 2% inflation target a flexible one. If liquidity in JGB market thins too much, that will heightned volatility and destabilise markets. Must be more miindful now of risk BoJ's huge asset buying will impair mechanism for maintaining fiscal displine.
At some point, BoJ must examine gradually starting to shift focus on monetary policy away from asset purchases to other policy tools. Technically possible for BoJ to keep buying JGBs for time being, but must be mindful of whether current pace of buying is sustanable.
On FX, some focus on the above comments from BoJ dissenter Kicuhi, cautioning BoJ on too much easing. Little impact on USD/JPY for now. USD/JPY at 119.77-79, tight 25-30 pips range of 119.64 to 119.84. Offer at 120.00-10, bids at 119.50-60 for now. More bids at 119.30-40.
EUR/JPY under pressure at 132.65-70, as EUR, EUR/Crosses weighed ahead of ECB details on QE. EUR/JPY hit 1-month lows around 132.41 in NY, lowest level since Feb 2 131.95. As EUR hit 11-half year lows of 1.1062, with talks hedge funds sold good amount of EUR yesterdfay. EUR/JPY bids 132.30-40, offers at 133.20-50.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.