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 latest meeting.
With the BOJ’s latest buying of the JPY70.1 billion ($637.3 million) worth of exchange-traded funds (ETF), its first purchase since April 21, details of the latest meeting become the key for USD/JPY traders. Also important to look into the minutes will be the details of the pandemic relief program extension and what’s the Japanese central bank’s outlook for the future amid tapering talks elsewhere.
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 readiness to ease the monetary policy. Though, any major differences between the policymakers considering the easy monetary outlook could signal a shift in the Japanese bank’s future actions.
In his post-monetary policy meeting press conference, Governor Haruhiko Kuroda said, “Inflation expectations are moving sideways,” which in turn highlights price pressure for the watchers.
How could it affect USD/JPY?
USD/JPY remains sidelined around 110.65 ahead of the event, after the risk-on mood favored bulls the previous day. While the BOJ minutes are less likely to offer any meaningful direction to the pair, any mentions of price pressure and signals of economic drawdown amid emergencies in major prefectures could test the quote’s latest upside. However, plans of further relief and rejection to the tapering may help the pair keep the recent upside momentum.
Technically, a two-month-old ascending trend channel keeps USD/JPY buyers until the quote stays beyond 109.60. However, the 111.00 threshold guards the immediate upside.
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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