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Weekly Market Analysis: April 26 – 30, 2021
Japanese Yen Awaits Key US Inflation Data After Dovish BoJ
The existing deal commits the government and the BOJ to achieving the 2% inflation target as early as possible. The BOJ has long missed Kuroda’s original timeline by about two years. But removing the phrase would go a step further in acknowledging that achieving stable inflation is a long-term goal while implying that factors other than timing also need to be considered.
US Stimulus Doubts Impact Black Gold Declines
The latest reports surrounding Kishida add to speculation about potential changes in the BoJ’s monetary policy after Governor Haruhiko Kuroda steps down in April. The developments come after Kishida’s spokesman told Bloomberg earlier this month that there was a possibility of reaching a new agreement with the central bank. Chief Cabinet Secretary Hirokazu Matsuno said there were no plans to revise the agreement with the BoJ, and he also expected the central bank to continue working toward its inflation target. The BoJ is expected to leave its settings unchanged at its policy meeting on Tuesday.US Stimulus Will Finally Be Released
Rodrigo Catril, currency strategist at National Australia Bank in Sydney, said the weekend news highlighted the government’s level of unease about the extent of the yen’s depreciation this year. Next year will offer an opportunity to reset and possibly take a more flexible approach to the BoJ’s objectives.Japanese Yen Worst Performance
The yen has been the worst-performing major currency this year, dropping more than 15% against the dollar as Kuroda’s push to buy more government bonds has meant Japanese yields have been capped, while they have soared in other countries like most central banks. Rate Hikes to Fight Inflation The yen was 0.4% stronger on Monday at 136.08 per dollar after earlier trading at 135.77. The currency fell to a more than three-decade low of 151.95 in October. The yield on Japan’s benchmark five-year Treasury note rose 2.5 basis points to 0.145% in early Monday trading to hit its highest since February 2015. Expectations are high among investors and economists that Kuroda’s successor will call for a policy review sometime after taking over the central bank. Bloomberg reported last week that BoJ officials are looking at the possibility of a policy review next year, after wage growth and a slowing global economy are scrutinized, according to a person familiar with the matter. Shinsuke Kajita, Head of Strategy at Resona Holdings, Tokyo, commented on the above issue. He said that the trigger for Yen buying was because the BoJ talks were getting closer and the relatively hawkish monetary policy decisions in the US and Europe last week had emphasized the difference with the BoJ's dovish stance. The above is information about the Yen currency. Keep updating the latest information through the GIC journal which will be announced every day. Of course, you can also trade on the GICTrade application with its latest feature, an ECN account, enjoy the advantages of the latest features with the lowest spread starting from 0 Rupiah! Also follow the GIC Gebyar Hadiah and get attractive prizes in it from GIC worth billions of Rupiah without a draw!
