Over the weekend there was a filed coup attempt in Russia, see the bullets above for the developments. Oil opened fairly steadily in US futures Sunday evening trade but soon gained ground. Its since retraced that gain is little changed on the session now.

From the session here today we had the Bank of Japan ‘Summary of Opinions’ from its June meeting. The "Summary of Opinions" provides a concise summary of the views expressed by Policy Board members during the meeting. The full Minutes of this meeting will follow on 2 August 2023.

Notable from this meeting were comments from members to the effect that:

  • There is strong chance consumer inflation will moderate, but won't slow back below 2%, toward middle of current fiscal year
  • Although the rise in raw material prices has paused, firms' pass-through of cost increases to their selling prices has intensified further, the employment and income situation has improved, and inbound tourism demand has recovered. Given this, inflationary pressure is likely to remain strong for the time being
  • Corporate behaviour has seen clear changes, and price and wage hikes have been incorporated into corporate strategy
  • due attention is required because the possibility that the persistence of price rises in Japan has been underestimated cannot be ruled out, as were the cases with Europe and the United States
  • One member called for early revision of YCC policy. The member said that while the BOJ should maintain its current monetary stimulus for now, since the cost of waiting to achieve sustainable 2% inflation is low for the BOJ’s overall easing program. However, from the perspective of improving market functioning, communication with investors and preventing sharp moves in interest rates when the BOJ exits its current monetary easing, using yield curve control is costly, the member added.

Taken together these points seem strongly indicative of a change to policy coming at the July (27 an 28) meeting, at the very least a ‘tweak’ to YCC.

USD/JPY opened a touch weaker on the session and has traded a circa 143.24 – 143.70 range.

oil wrtap 26 June 2023