Yesterday was a dismissal day for Volume and volatility as the Market took a day off in wake of the carnage observed last week. With no tier 1 Data seen until later in the week we may see a few days of range trading until we get some additional news to give the Market some direction. S&P changed its outlook on the U.S. Government to Stable from Negative Yesterday which gave the greenback some initial strength before pairing these gains as the Dollar Index dropped lower later in the session. EURUSD hit session highs at 1.3258 from being as low at 1.3180 in early NY trading. USD/JPY was bid early and touched 99.20 before drifting lower to 98.70 as the Greenback slumped. Just as I type we have broken the 98 Handle to the downside in wake of some comments from BOJ Governor Kuroda. The volatility in the Nikkei 225 and the Yen currency looks set to continue as Investors and Market participants are mixed in their opinions on the experiment going on in Japan and if it will prove to be effective or potentially one of this biggest financial disasters of all time.
During today's Asian session we saw the BOJ keep monetary policy unchanged and retained the plan of 60-70trl annual rise in Monetary Base. The BOJ left funding terms unchanged after JGB yield volatility and refrained from extending the duration of fixed rate-supplying operation. It kept up its promise to continue easing until its 2% inflation target is reached and will make policy adjustments as needed. The Nikkei 225 Future did not take to these assessments well and the Yen currency strengthened on the back of this move.
These assessments seemed re-assuring to the market but it did not react as expected and this could lead to further downside in the Japanese stock market as investors and traders obviously wanted to hear of a more aggressive easing plan or evidence that the easing program was having some positive effects on the Japanese Economy.
Good Luck in the Markets
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