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Forex: No Surprises in BOJ Announcement

Posted by Akhilesh Ganti on Dec 19, 2013 11:01:00 PM

{Chart: WorldWideMarkets - USD/JPY Daily}(click to enlarge)

usdjpy 121913 dA relatively quiet session with the US Dollar continuing to exhibit strength, especially -vs- the Yen, as the markets digest the FED's tapering announcement. BOJ announced the results of their monetary policy meeting and, as was widely expected, maintained the status quo. They pledged to continue easing until the 2% inflation target is achieved but promised that they will be cognizant of risks and make any policy adjustments as needed.

They also expect the Japanese economy to continue a “moderate” recovery and forecast the CPI, which is currently around 1%, to rise on a year-on-year basis. While most analysts did not expect any changes at this meeting, they are predicting that the BOJ will have to increase stimulus after the rise in the national sales tax in April 2014. The BOJ’s commitment to easing is in stark contrast to the FED's decision to reduce the pace of stimulus and should provide the impetus for USD/JPY to continue its upward trajectory during the first half of 2014.

Ranges:{WWM's New ALPHA Trader-DAILY charts[EUR,GBP,AUD,YEN,GOLD,OIL,WallStreet]}(click to enlarge)


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