The Japanese yen is mostly flat today. The recently concluded Bank of Japan meeting contained few new surprises. Governor Kuroda claimed that there is no need to adjust the existing yield curve control program (whereby 10-year Japanese government bond yields are fixed at 0%). Furthermore, he stated that day-to-day transactions in bonds do not indicate the direction of future monetary policy. The yen recently strengthened after the BoJ tapered its purchases of long-dated bonds. The move was taken as a sign of tightening monetary policy. Kuroda also claimed that the current 2% price target is appropriate. Looking at the statement, the Bank has upgraded its outlook on inflation from "weak" to "stable". Reactions in the yen have been fairly limited following the event. Our medium-term outlook on the yen remains neutral.
USD/JPY is currently trading above 110.90. EUR/JPY is currently flat and trading above 135.90.
Looking at economic data this week, markets will be watching the BoJ event as well as upcoming inflation figures. On Monday, the Reuters Tankan survey accelerated to an 11-year high (35). The BoJ meeting contained few new surprises. Governor Kuroda emphasized that the status quo was set to continue. Tomorrow, we'll see Japanese trade figures. We'll also get the leading economic index as well as the coincident index. On Thursday we'll see cross-border stock and bond investments. Finally on Friday we'll see inflation figures. We'll also see the BoJ's minutes. Governor Kuroda is also scheduled to speak on Friday. Last week, cross-border investments showed continued inflows into Japan.