Early on Wednesday morning in Asia, 23:50 GMT on Tuesday for the rest, the Bank of Japan (BoJ) will release monetary policy minutes of its meeting held on July 29-30. Although recent no change in monetary policy and its outlook from the BOJ deteriorates the importance of the event, traders will look for surprises in the details, if any.
Will the minutes’ statement support BOJ’s status quo?
Most market consensus favors the BOJ minutes to become a non-event considering the central bank’s always readiness to ease the monetary policy. However, any major differences between the policymakers considering the easy monetary outlook could signal a shift in the Japanese bank’s future actions.
The latest statement from the BOJ reiterates the same view while mentioning, “BOJ maintains a pledge to ease policy without hesitation if there is risk economy could lose momentum to hit price goal. Japan’s economy expanding moderately as a trend, keeps view unchanged. Need to pay closer attention to chance momentum to hit price goal will be lost.”
The central bank Governor Hauhiko Kuroda further confirmed the outlook with his Tuesday’s speech saying, “BOJ has become more keen to ease than before as risks to the economy is heightening. If BOJ were to ease, it ought to further push down short, medium-term yields. BOJ can avoid super long yields from declining too much by adjusting market operations appropriately.”
How could it affect USD/JPY?
While recent risk-off has more to do with the USD/JPY pair than the BOJ Minutes, considering the already taken place BOJ and statement from Governor Kuroda, only a big surprise from the outcome could lead to any major moves of the pair.
Technically, 106.80/75 area including June month low and multiple highs marked in mid-August offer immediate support to the pair, a break of which can recall 106.20 and 105.80 rest-points to the chart. On the contrary, 107.50, 107.80 and 108.50 could keep the pair’s upside restricted.
About BOJ Monetary Policy Meeting Minutes
The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).
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