Eyeing the BoJ Monetary Policy Announcement

Are we seeing the end of deflation in the land of the rising sun?

There has been heavy and nonstop speculation regarding the lifting of the Zero
Interest Rate Policy. Consensus opinion points to an end of the policy today at
5:00 GMT, 1pm Singapore time.

Although the most recent inflation number - CGPI released Wednesday - showed a
monthly drop of 0.1% yoy, price growth stuck at a 25-year high of 3.3%.

The carry-trade value of being anti-yen has always been a strong pull in the forex
market, but if the BoJ starts raising rates, we could begin to see some strength
in the Yen.

The market has already priced in a 25 basis point increase, for the first time
in almost 6 years, so keep watch for the statement instead.

I’m keeping my fingers crossed for the BoJ’s tone of statement instead.

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