Article by ForexTime
The USD/JPY’s six-week run flip-flop around 120.00 is persisting, flipping back above 120.0 after flopping last Thursday to a low at 119.62. Both currencies, meanwhile, have declined versus commodity and varies emerging nation currencies amid a coursing risk-on sentiment in global markets. The view is that key central banks, the BoJ included, will keep the monetary stimulus spigots fully open. However, BoJ chief Kuroda ruled out both a further expansion in QQE and the option for negative interest rates. He was speaking from the sidelines of an IMF meeting in Peru.
Kuroda said that “I don’t think it’s necessary.” He reasoned that the current plan, which entails asset purchases of Y80 trillion per year, “has been working” with the economy “recovering” and that “underlying inflation dynamics are strengthening.” He added that “unless oil prices further decline, the negative impact coming from lower oil prices will dissipate and then one percent inflation is quite likely to come” This combined with “quite tight labor market conditions” saw Kuroda arguing that “I think we can approach the two percent inflation target.” The range bound trade has put resistance on the currency pair at 121.25, and support near 118.50.
Article by ForexTime
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