In BoJ’s earlier anouncement today, the japanese central bank kept policy rates unchanged but allowed for more flexibility in its long term yield target. It is a minor change but in essence it allows for long term yeilds to go higher. USDJPY initially dipped but the move was quickly neutralized as the currency pair sought direction. USDJPY is currently right were it started at 111.04 as we speak.
The handover to Asia was essentially negative as the key US indices experienced losses throughout Monday’s trading. Asia was mostly negative so far this morning, although there were some exceptions mostly from the ASX 200 and the Japanese Nikkei.
The USD continued to be sold, although a look at the US Dollar index (an index showing the strength of the USD against a basket of other currencies) shows that it has mostly been engaging in range trading for much of June to date.
Overnight we had data for Chinese Manufacturing for July that was out at 51.2, only a notch softer than previous or expected. We also had the communication of the BoJ Policy statement. As we move into the european session we have German Unemployment, EZ CPI and GDP; then US PCE and consumer confidence in the afternoon.
