NEWS / Foreign Exchange

JPY Weaker on Speculation that the BoJ Will be Dovish

The Bank of Japan initiated their Monetary Policy Meeting this morning and will announce rates tomorrow. We believe that they will maintain rates at 0.5 pct. as the market.

Overnight News Bullets

• FR Current Account (Jan) out at -2.8B vs. -3.1B expected.
• E-Z OECD Leading Indicators (Jan) out at 109.3 vs. 109.4 prior (revised from 109.3(.
• US CPI MoM/YoY (Feb) out at 0.4%/2.4% vs. 0.3%/2.3% expected. Core CPI MoM/YoY out at 0.2%/2.7% as expected.
• US CPI Index SA (Feb) out at 209.135 vs. 208.632 prior. CPI Index NSA out at 203.499 vs. 203.400 expected.
• US Industrial Production (Feb) out at 1.0% vs. 0.3% expected.
• US Capacity Utilization (Feb) out at 82.0% vs. 81.3% expected.
• US U. of Michigan Confidence (Mar P) out at 88.8 vs. 89.0 expected.
• UK Rightmove House Prices (Mar) MoM/YoY out at 1.5%/12.2% vs. 0.9%/11.5% prior.
• JN Nationwide Dept. Sales (YoY) out at 1.7% vs. 0.0% prior.
• JN BOJ Initiated MPC Meeting this morning.

Markets

• FX: JPY weaker on dovish Fukui figures.
• Fixed Income: Bunds and 10yrs both lower on Friday. JGB??™s unchanged today.
• Stocks: Bearish sessions in both Europe and in the US. Nikkei rising 1.6 pct. today.
• Commodities: Precious metals higher. Crude rejected at support, now above $60.5/bbl.
  

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• Is it time for some complacency? Weekly bars in Asian Carry Trade crosses and GBPJPY look very strong, headed for full retracement higher. Only concern is USDJPY, which looks weak. EURUSD headed towards 1.3666?
• Equities still not looking strong. Especially Emerging Markets shares still look weak, but major indices not too impressive either.
• Possible triggers for bigger events: Credit spreads to widen more. US Housing Figures to come out still weaker. FOMC statement to be hawkish.

FX