BoJ delivered a dovish message – UOB

Pablo Piovano FXStreet

Senior Economist Alvin Liew at UOB Group assessed the recent BoJ meeting and its renewed dovish bias.

Key Quotes

“The Bank of Japan (BOJ) kept its monetary policy stance and policy rate unchanged in the October Monetary Policy Meeting (MPM) decision today (31 Oct). However, it “dovishly” enhanced its forward guidance to suggest possible rate cuts in future policy meetings (without making any immediate changes)”.

“The BOJ’s new forward guidance states: “As for the policy rates, the Bank expects short- and long-term interest rates to remain at their present or lower levels as long as it is necessary to pay close attention to the possibility that the momentum toward achieving the price stability will be lost.”

“The BOJ’s projected GDP growth and CPI inflation estimates and the forecast ranges were broadly adjusted lower across the forecast period. The effects of the consumption tax hike are still assumed to be “flushed out” by fiscal 2021 with CPI inflation projected now at 1.5% in fiscal 2021 (from 1.6% previously), well below the 2% target”.

“The “dovishly” enhanced forward guidance was perhaps to re-emphasize the BOJ’s commitment to achieving the price target and a signal that more easing measures could be coming (without actually doing easing in the immediate period). However, continued forward guidance without action will not cut it in the end, and we believe that the BOJ will eventually need to act on easing monetary policy via deepening its negative policy call rate to -0.2% possibly in 1Q 2020 (from -0.1% presently)”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.