Japan CPI and BOJ minutes roundup for 26.01.2018

  • That core number is not going to help changing Kuroda and friends’ mind on easy monetary policies. Any excuse is good to keep the foot on the gas pedal despite the headline number advancing.
  •  BOJ minutes
  • Most Members Shared View Momentum Toward Achieving Price Target Was Maintained
     – Most Members Shared View It Was Appropriate For BoJ To Persistently Pursue Powerful Monetary Easing
    – One Member Said It Was Too Early For Boj To Change Monetary Policy
    – One Member Said Current Monetary Easing Policy Was Helping Facilitate Productivity Growth
    – Some Members Said Must Continue To Look At Both Positive, Negative Effects Of Current Policy Including Effects On Financial System
    – One Member Said Functioning Of Financial Intermediation Had Not Been Impaired Yet, But Bank Profits Show Effects Of Low Rates On Strength Of Financial Institutions Had Been Accumulating
    -One Member Said Boj Should Keep Policy Steady Now But Might Need To Consider Adjusting Level Of Interest Rates When Economy, Prices Were Expected To Continue Improving
    -One Member Said Effects, Side-Effects Of Risky Asset Purchases Should Be Examined From Every Angle, As Stock Prices And Corporate Profits Had Substantially Improved, Expected To Stay Firm
  • Same old same old there, we could argue the “side-effects” considerations getting louder but that won’t alter monetary policy for now I’d say

The sluggish core CPI caused the JPY to weaken about 0.25% for a while but the 109.70/80 first  resistance is already capping it . Important for the next 24 hours is the 110.00/15 zone where we have a cluster of Fibs and trendlines. Shame it won’t be decided upon by economic data but by the Davos reality TV stars unless tomorrow’s US GDP could steal the show? I closed my USDJPY shorts happily back through 108.85 after the break was undone by His Royal Orangeness, I will monitor event till the US GDP or if political muppets decide otherwise.

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