Despite high expectations for yesterday's events in the US (House tax plan and Fed Chair announcement), the yen ended the day flat. The currency continues to look oversold in the short-term time frame, particularly against the US dollar. USD/JPY has been trading between 114 and 114.50 for the past few days now. Looking at recent global bond yields, yields were weaker earlier this week and the yen is likely to strengthen as a result. So far, the currency has been weaker than expected based on the yen's historical relationship versus bond yields.
USD/JPY is currently trading just above 114. EUR/JPY has been rebounding and is currently trading above 132.90.
As expected, the BoJ meeting was a non-event as the Bank remains committed to its current policies. Retail sales numbers missed expectations (2.2% vs. 2.5% expected). Unemployment figures came within expectations (2.8%) while household spending was much weaker than expectations (-0.3% vs. 0.7% expected). Nikkei manufacturing PMIs were slighly lower relative to the prior figures (52.8 vs. 52.9 prior). Cross-border stock investments showed that foreigners continue to buy Japanese stocks (697b vs 683b prior) while Japanese investors buy foreign bonds (-1084 vs 11b prior). Consumer confidence figures were stronger than the previous figures (44.5 vs. 43.9 prior). Last week saw low CPI figures miss expectations.