ForexLive Asia FX news: BOJ Jan. meeting - policy steady, upgrades GDP 4cast

Forex news for Asia trading Tuesday 31 January 2017

• Economic data due from the US on Tuesday


• BOJ announce: Maintains policy


• Still waiting on the BOJ announcement - yen at its session high


• Trump has fired Acting U.S. Attorney General Sally Yates


• Reminder - BOJ policy announcement due soon (link to previews)


• New Zealand - M3 Money Supply (December) +6.4% y/y (prior 5.9%)


• IMF board will meet on Feb 6 to discuss Greece"s debt-servicing capacity


• Reminder - China markets closed, re-open February 3


• Australia Private Sector Credit (Dec) : 0.7% (expected 0.5%)


• Australia - NAB Business conditions: 11 (prior 5) & Confidence: 6 (prior 5)


• More from Aso: Expect the weak yen, strong USD trend to continue in first half of year


• UK data - GfK Consumer Confidence (January): -5 (expected -8)


• Japan Industrial Production m/m (Dec. preliminary): 0.5% m/m (expected 0.3%)


• Japan fin min Aso: Important to keep close communication on FX with US


• Japan data (Dec.): Overall Household Spending -0.3% y/y (expected -0.9%) (+ more)


• Q: What time is the Bank of Japan announcement today? A: Well, it depends


• The "unusual risk aversion trade to see CAD strength on day when oil & stocks are down"


• Video: The market moves right now aren"t about Trump"s policies


• Australia - ANZ / Roy Morgan Weekly Consumer Confidence: 118.1 (prior 117.0)


• Note for the diary - Fed"s Yellen to appear before Congress panel February 15


• PIMCO"s Canada"s 2017 Economic Outlook: "Consumers could face a very difficult 2017"


• Trade ideas thread - Tuesday 31 January 2017


• BOC dep gov Leduc: Rising house prices, rising consumer indebtedness "really worrisome"


• Bank of Japan announcement due today - preview

It was Bank of Japan announcement day, with the focus on the central bank and what they would do or not do. There was some small expectation they may have indicated some sort of QQE "taper", a low-probability outcome, but greater expectations of an upgrade to their view of economic growth. The Bank was to issue its updated forecasts for both GDP and inflation - there was little expectation they bank was going to boost its views on inflation.

Before the BOJ today we got preliminary IP data for December, a beat q/q:

• Japan Industrial Production m/m (Dec. preliminary): 0.5% m/m (expected 0.3%)

As was Household spending data (negative result on the y/y, but not as bad as expected)

• Japan data (Dec.): Overall Household Spending -0.3% y/y (expected -0.9%)

And so, to the BOJ .... The announcement came in pretty much as expected, the post is here,

• BOJ announce: Maintains policy

In brief:

• Policy was maintained


• No sign of a "taper"


• GDP forecasts for the next 3 years were bumped up a little


• The inflation forecast (Core CPI) was lowered for the coming year, and left unchanged for the following two years

Prior to the Bank"s announcement we got news out of the US that

• President Trump had fired Acting U.S. Attorney General Sally Yates ,

in response to her directing Justice Department attorneys not to defend President Trump"s executive order refugee and immigration ban - she said she was not convinced that the executive order is lawful.

The USD wobbled a little bit after this news hit, USD/JPY down to session lows (of the time) around 113.50 (EUR, CHF, GBP etc. all a little higher against the USD also).

USD/JPY lost further ground after the BOJ announcement, down around circa 113.25 lows before rapidly snapping back to rally 45+ points and then stabilise again. Its above session lows as I update, straddling 113.50 and thereabouts.

GBP/USD has edged higher through the session, up around 40 or so points.

AUD is a little net higher on the session. Earlier today we got the NAB Business Survey (December) which showed a surge (to 11 from 6 previously) in Business Conditions and a flat Confidence measure (6 from a revised (from 5 to) 6 prior). While the headline "conditions" result appears strong there were some notable weak spots in the details which kept the market from being too happy with the result. Net, though, from 6 to 11, it was a good result.

Gold gained on the session, this time getting above 1200USD (a hurdle it didn"t manage yesterday). Follow through has been ... well, it hasn"t really. Its around $1201.50 as I update.

Regional equities:

• Nikkei -1.38%  


• Shanghai closed (reopen Friday China time)


• HK closed (reopen Wednesday HK time)


• ASX -0.61%

ForexLive Asia FX news: BOJ Jan. meeting - policy steady, upgrades GDP 4cast
ForexLive Asia FX news: BOJ Jan. meeting - policy steady, upgrades GDP 4cast
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