After yesterday’s shellacking of the Yen it was a morning of consolidation, USD/JPY mainly confined to a 15 point range above 81.10, with one test briefly below there in the early part of the Tokyo lunch (80.97 low). EUR/JPY, too held fairly steady, one quick poke lower in conjunction with the USD/JPY sub-81 test.
Other currencies were just flat – very little movement indeed.
The AUD/USD lost 15 points going into early mid-East trade, its biggest move on the day and most likely AUD/JPY selling related.
EUR 1.2767-73, the USD/CAD and NZD/USD both very quiet also.
- Late NY saw a speech from the NY Fed’s William Dudley. His speech largely related to regulation of the TBTF banks, not touching on monetary policy and as such was ignored by the market.
- Japanese media reported the election was expected to be announced after a 0645GMT plenary session of the lower house of the Diet (1545 Tokyo time).
- Japan’s Finance Minister, Koriki Jojima said he ‘always expects the BOJ to take bold policy steps’ - seemingly in response to Opposition leader Abe’s comments yesterday that they would be bold under his new government (if elected).
- Downward revisions to Japanese economic assessments this morning, though some bright spots suggested.
- In the early Tokyo afternoon Reuters carried a story with policy comments from the opposition LDP; with the LDP to:
- Aim for nominal growth of 3pct
Aim for inflation target of 2pct
Strengthen cooperation b/w govt and BOJ through revision of BOJ law
Do utmost to swiftly beat deflation, strong yen
To compile extra budget to stimulate economy after taking power
- These comments failed to ignite yen selling as Abe’s similar comments did yesterday
- Lagarde (IMF) hinted at continued tensions between the IMF and European leaders re the Greek negotiations:
- IMF’s Lagarde, when asked about likelihood of Greek deal next week says, “It’s not over until the fat lady sings”
- No response from the EUR (the rest of her comments were innocuous).
- Comments from the IMF were also reported in regards to Australia, saying a more accommodative stance from the RBA is appropriate – that there is scope for more easing if needed
