Trade The News | Jan 22, 2013 06:15AM ET
Economic Data
A historic policy decision from the Bank of Japan yielding to pressure from the new PM Abe cabinet was at the forefront of market focus and largely delivered a heavy dose of policy easing in line with expectations. BOJ left target rate unchanged at 0.0-0.1%, set a 2% inflation target in a joint statement to be achieved "at the earliest possible time", and also introduced an open-ended asset purchase program a-la Federal Reserve. USD/JPY initially spiked above the ¥90 handle but quickly reversed direction to test below ¥89 as traders observed several key caveats in the BOJ statement: 1) the 2% inflation target was not unanimous, with 2 members voting against the change; 2) the open ended program in the monthly purchase amount of ¥13T would not begin until 2014 when the current ¥101T program is set to expire; 3) the ¥13T in purchases is skewed heavily in favor of short-term T-Bills; 4) board member Miyao was the only voter in favor of a more drastic measure in support of "virtually zero interest rate policy until 2% y/y CPI is in sight"; 5) BOJ outlook section forecasted y/y change in CPI to turn negative in the short term vs prior expectation of remaining flat. Moreover, BOJ lowered its FY12 GDP target to 1.0% from 1.5% and raised FY13 GDP to 2.3% from 1.4%. FY14 was expected to slow to +0.8% from 0.5% prior target. BOJ also did not unveil plans to step up purchases of foreign bonds, as has been speculated by some of the more dovish economists.
Currencies/Fixed Income/Commodities
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.