Japanese Yen Steady On BoJ Minutes, USD/JPY Looks Tired
- The Bank of Japan’s policy makers recommitted to their inflation target in July
- However, the Yen didn’t move far
- North Korea and Japan’s own snap election are more pressing concerns
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The Japanese Yen didn’t move much Tuesday on the release of minutes from the Bank of Japan’s July monetary policy committee, in which members recommitted themselves to the long fight to boost inflation.
Most thought it “vital” that the BoJ should achieve its target of consumer price inflation sustainably above 2%, and saw momentum toward the goal as being maintained. Prices have not risen at that pace since 2015 and, with CPI currently running at 0.4% despite massive stimulus efforts, there is clearly still some way to go.
Rate-setters said that companies were likely to shift toward gradually raising wages and prices. They noted that measures of inflation expectations had at least stopped declining and recommended that the BoJ should press on with both quantitative easing and yield curve control.
The Yen showed little reaction to the Minutes document. They are released quite a long time after the meeting in question although a “summary of “opinions” comes out earlier. Perhaps the currency markets have more pressing matters to consider after the announcement of a snap election on October 22.
A victory for Prime Minister Shinzo Abe would see the continuation of his stimulative “Abenomics” program, and may increase expectations that current BoJ Governor Haruhiko Kuroda may do another stint at the helm after his current term expires. He is seen as the monetary face of Abenomics.
More bellicose rhetoric from North Korea weighed on the US Dollar at the open. The rogue state’s foreign minister said that the US had declared war on the country and that Pyongyang had the right to shoot down US bombers.
On its daily chart USD/JPY’s burst of recent vigor looks played out, with the greenback falling below a steep uptrend which has been in place since September 8.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.