BOJ faces test in keeping up with dovish-leaning U.S., European peers | Metals Mine

  • BOJ faces test in keeping up with dovish-leaning U.S., European peers

    From reuters.com

    The Bank of Japan faces its first test on Tuesday in keeping up with its increasingly dovish U.S. and European peers, as the growing pain from soft global demand and trade tensions weigh on the country’s modest economic recovery. With solid domestic demand in Japan helping to offset weak exports, many BOJ officials see no imminent need to roll out more stimulus, preferring to save their limited ammunition in case economic conditions deteriorate, sources familiar with its thinking have said. The European Central Bank’s decision last week to hold off on immediate policy easing gave the BOJ some breathing space and ... (full story)

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Vorenzd
Jul 29, 2019 6:34pm
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Quoting EventsTrader
There's a lot of uncertainty heading into this BOJ meeting as far as what measures they'll take this meeting and what kind of forward guidance they'll issue. With the Fed, BOE, and BOJ all meeting this week, we could see the BOJ meeting have a bigger than normal impact on currencies and precious metals given that they'll lead off the week. The market is looking for some clues and will likely remain sensitive until the Fed delivers later this week. Gold could rally if the BOJ overshoots and eases more than expected. Although moves might remain limited...
There is lots of uncertainty everywhere lately... here's my view:

If we take into consideration that the FED 25bps rate cut is almost certain, i believe BOJ doesn't have to offer further easing and can save those economic tools for when they are needed more.

BOJ doesn't have to weaken the yen at this point as most capital will be flowing into US stocks after FED rate announcment, so i don't think investors will look for a yen as an safer alternative yet.

With the danger of the yen shooting up in value minimized for now i believe BOJ won't be making any tweaks to it's policy yet.
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EventsTrader
Jul 29, 2019 4:25pm
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There's a lot of uncertainty heading into this BOJ meeting as far as what measures they'll take this meeting and what kind of forward guidance they'll issue. With the Fed, BOE, and BOJ all meeting this week, we could see the BOJ meeting have a bigger than normal impact on currencies and precious metals given that they'll lead off the week. The market is looking for some clues and will likely remain sensitive until the Fed delivers later this week.

Gold could rally if the BOJ overshoots and eases more than expected. Although moves might remain limited ahead of the 31st FOMC meeting.
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Brendan777
Jul 29, 2019 6:15pm
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Not that limited, EJ shot up today...
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