USD/JPY Higher On Equities Open, Ahead Of BoJ Policy Statement
THE TAKEAWAY:Bond buying could hint at increased demand for Japanese assets > Balance of trade disappoints > Market looks past data, responds to equities open and awaits BoJ > USD/JPY Higher
The Japanese Yen traded slightly higher against the US Dollar as Japan released a mix of economic data. Last week, foreign bond purchases by Japanese investors totaled 689.9 billion Yen while foreign stock investments saw a net sell of 19.5 billion. At the same time, foreigners invested 124.4 billion Yen into Japanese bonds and sold less in stocks than the previous week, suggesting demand for Yen-denominated assets could be rising.
Other data released include June’s balance of payment figures that disappointed expectations. Current account balance printed a 336.3 billion Yen reading (646.2 billion seasonally adjusted), declining 20.3 percent year-over-year, while trade balance saw net outflows of 139.3 billion. Meanwhile, bank lending reported as expected with housing loans increasing 3.2 percent in the second quarter.
However, USD/JPY seemed unchanged by the releases. Instead the pair seemed to be correcting higher after prices found an intraday dip at around 96.316. Price however, did respond considerably to the Asian/Pacific equities opened, moving nearly 15 pips higher.
Looking ahead, the Bank of Japan is expected to release its monetary policy statement later today with a follow-up speech by Governor Haruhiko Kuroda at 6:30 GMT. Investors will likely be looking at its rhetoric to guide their expectations on whether the central bank will maintain the current pace of its massive stimulus program.
AUD/USD (5-Minute Chart)
Source: FXCM Marketscope
Jimmy Yang, DailyFX Research Team