Both govt and central bank have created non-deflationary condition
- We have a blank slate on who would become the next BOJ govt (really?)
- Will order new policy package and extra budget at Cabinet meeting on Wed, Nov 1st
- aim to get country out of deflation by accelerating wage growth
- Will compile package in early Dec and extra budget by end of 2017
- Economy remains the top priority
- We’re in continuity on policies, the equity market should like it as they already did overnight .
- Usdjpy was already trading higher (113.95)in anticipation of the stimulus package and Kuroda staying at the helm of BOJ.
- The stronger US ADP report and a better risk environment is helping USDJPY back to the 114.20 handle. An upbeat FOMC could be the trigger to finally tackle the 114.50.
I’m long USDJPY and a tad GBPJPY in the run up to.
If not , range trading will prevail as I don’t think JPY can strengthen to much from here.