6 Feb 2015
Overseas easing dampening impact of BoJ easing on yen – BTMU
FXStreet (Barcelona) - According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, the overseas easing is impacting BoJ’s easing by making it look less aggressive, with the Yen continuing to firm.
Key Quotes
“The yen continues to trade on a firmer footing early this year. The more active easing of monetary policy overseas is making easing already announced by the BoJ appear less aggressive on a relative basis, although it is still the most aggressive.”
“Government pressure on the BoJ to ease monetary policy to return inflation back to their target as soon as possible also appears to have been reduced in the near-term. As a result investor expectations that the BoJ will ease policy further in the near-term are declining supporting the yen.”
“That being said the government has officially nominated this week Yutaka Harada to be a member on the BoJ board. He is in favour of reflation policies to revive Japan’s economy, and in a recent interview stated that “inflation has reached about 1% but it needs to go higher…for that purpose more easing is needed”. He is set to replace Ryuzo Miyao who has supported looser policies.”
“Aggressive BoJ monetary easing is set to remain in place throughout this year and beyond remaining a weight on the yen.”
Key Quotes
“The yen continues to trade on a firmer footing early this year. The more active easing of monetary policy overseas is making easing already announced by the BoJ appear less aggressive on a relative basis, although it is still the most aggressive.”
“Government pressure on the BoJ to ease monetary policy to return inflation back to their target as soon as possible also appears to have been reduced in the near-term. As a result investor expectations that the BoJ will ease policy further in the near-term are declining supporting the yen.”
“That being said the government has officially nominated this week Yutaka Harada to be a member on the BoJ board. He is in favour of reflation policies to revive Japan’s economy, and in a recent interview stated that “inflation has reached about 1% but it needs to go higher…for that purpose more easing is needed”. He is set to replace Ryuzo Miyao who has supported looser policies.”
“Aggressive BoJ monetary easing is set to remain in place throughout this year and beyond remaining a weight on the yen.”