Governor of the Bank of Japan, Haruhiko Kuroda, has stated that Japanese inflation is likely to slow down, and as a result, the Bank of Japan will maintain its current monetary easing policies. Kuroda's comments suggest that the Bank of Japan is taking a cautious approach to its monetary policy decisions and is closely monitoring economic conditions.
Maintaining monetary easing policies, such as low interest rates and asset purchases, can help to stimulate economic growth by making it easier for businesses and consumers to access credit. However, it can also lead to inflation if the economy overheats.
Overall, the article suggests that Kuroda's comments reflect a careful balancing act that the Bank of Japan must undertake to support economic growth without triggering inflation. The Bank of Japan's policies will likely continue to play an important role in supporting Japan's economy in the coming months.
Conclusion CAD/JPY @ 99.259 closed on April 14 @ 3:52 at 100.042 for a profit of 78.3 pips of profit
CAD Currency News
On Wednesday, the S&P/TSX Composite index experienced a second consecutive day of decline, falling below the 20,000 level, which it had not reached since late March. This downward movement mirrored global market trends. The materials sector experienced a significant decline of 2.8%, while financials dropped by 1.5%. Bank of Montreal and Bank of Nova Scotia were among the worst-performing stocks, as they reported lower adjusted earnings and increased provisions due to economic uncertainty. Market sentiment remained subdued due to the ongoing deadlock over the US debt limit, with negotiations still unresolved. Traders also adopted a more cautious approach in anticipation of the release of the latest Federal Open Market Committee (FOMC) minutes, which could provide insights into the future direction of US interest rates.
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JPY Currency News
The Reuters Tankan survey shows that the sentiment index for big manufacturers in Japan reached a positive reading of +6 in May, marking the first positive reading this year.
The index is expected to rise further to +8 in August. The service-sector index also hit its highest level this year, reaching 25 in May and expected to be 24 in August.
These solid readings may contribute to speculation that the Bank of Japan (BOJ) could consider normalizing its easing policy sooner than anticipated.
However, BOJ Governor Ueda has repeatedly emphasized the need for sustainable inflation, supported by wage hikes, to reach a rate of 2% before considering any exit from current policy measures.
The Reuters Tankan survey is conducted monthly and provides insights into the sentiment of around 500 large- and mid-sized non-financial companies in Japan. It serves as a pre-emptive indicator for the BOJ's quarterly tankan report.
Conclusion CAD/JPY @ 102.537