With Haruhiko Kuroda now established as the latest Governor of the Bank of Japan, investors are anxiously awaiting the central bank’s first policy meeting with him at the helm. Will Kuroda live up to expectations and introduce aggressive easing methods in an attempt to bring deflation to an end? Time will tell.
The Japanese Yen exchange rate was in the region of 94.7600 Yen to one US Dollar as of 14:00 pm
After Cyprus reached an accord with its international creditors this morning, making the nation eligible for a 10 billion Euro bailout, increasing risk appetite saw the Yen dip against its safe-haven rival the US Dollar. Although the agreement, which includes the winding down of Cyprus’ second largest bank at the loss of thousands of jobs, is proving unpopular among the nation’s populace, the EU is hopeful that it could save Cyprus from defaulting and being forced to exit the Eurozone. In the hours following the bailout agreement the USD/JPY exchange rate held steady in the high 94 range.
The only piece of Japanese data scheduled for release today is the nation’s Corporate Services Price Index. This measure of inflation provides an indication of how well the BOJ’s attempts at halting deflationary trends within the Japanese economy are working. Since June 2012 the index has recorded readings of below 0. Although economists have forecast that this month’s index will hold at 0.0% – implying a continuing issue with deflation in the business sector – a surprise upward climb could increase the speculation surrounding next week’s BOJ policy meeting.
So far Kuroda has remained tight lipped over exactly what action he will take in order to reach the BOJ’s inflation target of 2 per cent within two years.
Also of interest to the Yen this week are Wednesday’s Japanese large retailer’s sales/retail trade figures, Thursday’s Japanese manufacturing PMI, Jobless rate and CPI and Friday’s housing starts data for the nation.
The Bank of Japan’s rate decision will be announced on April 4th.