• Is not QE
• BOJ aims to support private demand by pushing down long-term rates
• Wants broad understanding of BOJ’s easy stance to boost economy
• Japan economy somewhat overshooting BOJ’s forecasts
• BOJ’s step aimed at ensuring economic, price recovery
• Will take time for prices to return to desireable level.  No miracle step that would lift prices
• Will examine effect, drawbacks of each step in guiding monetary policy
• BOJ policy alone cannot help beat deflation
• Split vote will not hurt BOJ credibility

This Bloomberg report has surveyed 18 international economists and the majority opinion is that the BoJ will expand its credit program by at least 5 trillion JPY. The policy decision, which is expected to leave rates on hold at 0.1%, will be announced in the early afternoon, Tokyo time and the Governor’s statement is scheduled for 3:30 pm Tokyo time.

The themes for this Asian trading session are well worn ones; what will the EU do about the Greek situation, have Japanese corporates more JPY repatriations to do before the month is out, and why is China using stronger language in it’s financial dealings with the US? We won’t get an answer to any of these questions but news on any of these topics will cause some market movement.

Good luck today.

Concerns remain that euro’s woes could affect yen.

Japanese authorities remain very much on the guard against any renewed yen strength.

• Economy has been steadily picking up
• Maintains view deflation poses threat to economy
• Government repeats will work with BOJ to beat deflation, ensure econmic recovery
• Raises assessment on personal consumption, capex

Japan government official says escape from deflation still far off.

About comments made by Japanese PM Hatoyama in parliament. He feels the government needs to take steps against the yen’s recent strength, which he says doesn’t reflect Japan’s economic and industrial conditions (which as we well know are pretty dire) Hatoyama went as far as to suggest joint international action to address the issue.

USD/JPY steady around 90.55, but yen has weakened on major crosses.  EUR/JPY is up at 124.25 from early 124.05, while GBP/JPY up at 136.85 from early 136.45.

US investment house apparently out tipping USD/JPY at 109 by year end.  I’m with those guys (and gals)

USD/JPY sits at 90.60, price action having easily been contained within 90.00-91.00 parameters over past 24 hours.

Supporting the pairing is focus on next weeks March 16/17 BOJ meeting and possibility of more easing/support measures.  Bloomberg quotes two anonymous BOJ officials as saying central bank may seek to expand 10 trillon yen fund that provides loans to banks.

On the flip side, acting as a counter-balance, are  reports of ongoing fiscal year end repatriation flows.

Buy orders tipped at 90.00/20, small stops just below.  Sell orders layered from 90.80 up to 91.20.

Capacity utilisation index +3.9%, MoM.

• Closely watching BOJ’s decision next week
• Want ot attend next week;s BOJ meeting if possible
• BOJ has sense of crisis about Japan’s deflation
• Govt, BOJ share view Japan is in mild deflation. Both will do what they can to pull Japan out of deflation

Revised Capex for the same period was +0.9%, better than the expected 0.3%. USD/JPY is unchanged at 90.45.

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