- The announcement of a special BoJ policy meeting for today caused major speculation and some serious short covering of USD/JPY and JPY-cross positions
- The options for the BoJ include buying more Treasury Bills or even buying more foreign bonds- all events which would be bullish for USD/JPY
- Heavy stops are anticipated above 88.50
- RBA raises rates as expected by 25 bps to 3.75%
- China November PMI unchanged at 55.2
- Australia November PMI falls 0.5 points
- Regional bourses made modest gains, buoyed by the rise in the Nikkei after the BoJ announcement
- Gold has been steady around $1080/oz.
A very quiet session has erupted in the afternoon with the announcement of a special policy meeting of the BoJ which is expected to introduce some Quantitative Easing measures which will also deal with the recent strengthening of the JPY.
USD/JPY jumped from 86.40 through stops above 87.00 immediatley and has since consolidated as traders speculate on the types of measures which the BoJ is likely to undertake. Other JPY crosses have followed suit with EUR/JPY jumping through the previous high at 130.85 and triggering stops above 131.00. Range 86.16/87.47
AUD/USD fell after the as expected rate rise from the RBA but bids at .9120 and AUD/JPY short-covering have helped the AUD recover. Nevertheless the AUD/USD is surprisingly closing the session near its lows. Range .9122/83
Sterling has also fallen gradually throughout the session but interest was extremely limited. Range 1.6414/61
Similarly the EUR has taken a back seat to the AUD and the JPY in particular with EUR/USD trading only a 1.5001/40 range.
Markets: Nikkei +1.3%, Kospi +0.5%, HK +0.5%.
