By TraderVox.com
Tradervox (Dublin) – Speculation of an additional stimulus in Japans economy has continued as the Bank of Japan prepares to conclude its policy meeting. Traders are expecting the BOJ to add stimulus which has resulted to the strengthening of the Australian Dollar. Aussie has been declining but as Asian stocks rose and the business environment increased at the start of the week, the demand for risk has been boosted hence boosting the Aussie. However, the gains in the Aussie were limited due to reports of slowing Chinese economic growth.
Most analysts and traders alike are looking at the BOJ’s decision with hyped easing hopes from the recent data and BOJ sentiments. According to Cameron Umetsu who is an economist at UBS AG, the Bank of Japan easing will boost the potential to put the yen under pressure. A National Australia Bank Ltd survey on investor confidence showed that investors were more confident in the economy in the month of March. The Australian dollar also declined by most in the same month. Speculations of a BOJ easing have improved the Aussie while weakening the yen against major currencies.
The yen has weakened by 0.5 percent today making it the worst performer among major ten currencies. However, the Australian dollar strengthened by 0.2 percent against the US dollar to trade at $ 1.0337. The Aussie registered a 0.5 percent increase against the yen to trade at 84.48 yen as well as the Kiwi, which gained by the same margin to trade at 67.27 yen.
The positive reports expected from China showing that the imports rose by 9 percent may boost the Aussie. However, according to Janu Chan, a St. George Bank Ltd Economist in Sydney, signs of weakness in the Chinese report expected to be released today will ultimately weigh down on the south pacific currencies. China is the biggest trading partner for Australia and the second largest for New Zealand.
Ahead of the decision by the BOJ, yen fell by 0.6 against the euro to trade at 107.39 and by 0.3 against the US dollar to trade at 81.74 yen.
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