On Tuesday, the USD/JPY pair is pointing down - in anticipation of the Fed meeting, few people are willing to take risks.
The Japanese yen on Tuesday is rising in tandem with the US dollar. The current quote in the USD/JPY instrument is 117.89.
This morning, in his speech, the Minister of Finance of Japan Mr. Aso voiced support for actions of the Bank of Japan. In addition, earlier the Ministry of Finance fully supported the regulator in their ongoing soft monetary policy. However, three months earlier the tone of the department changed towards a greater share of skepticism: the Ministry of Finance said that overly long stimulation is unlikely to benefit the local economy. It seems that after the quarter the opinion has changed: now the Ministry of Finance once again expressed support for the BoE.
Aso said that his department is in agreement with the target for inflation of 2%, and understands the difficulty of achieving the specified target. However, the Finance Ministry looks forward to continuing to stimulate the Japanese economy.
On the subject of stimulation, its timing and the potential expansion of QE this week is relevant for the Japanese market. On Thursday and Friday a regular meeting of the Bank of Japan will be held, from which the market is eagerly awaiting policy easing. January 2016 became stressful for the capital markets, the yen has risen, and this does not bear good news for exporters and the budget. We must try to play against that trend.
The probability of the expansion of the stimulation program for the Japanese economy is quite serious. However, apart from the obvious advantages, there are disadvantages that are not expressed; for example, the country's public debt will start to grow again. It is, as they say, the other dark side of the moon.
RoboForex Analytical Department
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