BOJ Stands Firm On Policy Despite Outlook

Once again, the Bank of Japan decided to maintain the status quo and held off with additional quantitative easing. The Bank of Japan’s also announced that its outlook for the future of the UK economy was relatively bleak, with price momentum weakening and growth only deemed as moderate given the tepid growth in consumption and exports. The Bank of Japan governor said that the BOJ’s inflation target set at 2% was likely not going to be hit until “around fiscal 2018;” that would be after Haruhiko Kuroda gives up the helm of the BOJ.

As a result, without hopes of additional easing, the Yen came under some pressure. As reported at 9:43 (GMT) in London, the USD/JPY was higher at 104.914 Yen, a gain of 0.16%; the pair has ranged from a trough of 104.6400 Yen to a peak of 105.11 Yen in today’s trade. The EUR/JPY was up 0.35% at 115.4169 Yen, moving closer to the session peak of 115.49 Yen.

US Data, Policymakers Draw Markets’ Attention

From Japan, markets will be turning their attention to the US for the release of Manufacturing PMI numbers from the Institute of Supply Management. A consensus of analysts polled shows a forecast reading of 51.7, up from 51.5; for reference, any number above 50.0 suggests expansion of the sector. Beyond today’s data, FX traders will resume their focus on the upcoming Fed announcement and beyond that, the non-farms payroll data to be released on Friday. Markets are still attempting to gauge the timing of the next rate hike, and an upbeat release of Friday’s labor numbers could cement expectations of an imminent hike.