The higher-than-expected inflation data for January has reignited concerns about rising prices and its implications for Federal Reserve policy. While investors had anticipated rate cuts in the near term, the hot inflation print may delay such actions. As the Fed navigates the delicate balance between containing inflation and...
The Aftermath of the BoJ’s Policy Statement
2023-10-31 • Updated
The Bank of Japan (BoJ) recently concluded its October monetary policy review meeting, deciding not to make any adjustments to its current policy settings. This means the interest rate remains at -10bps, and the 10-year JGB yield target remains at 0%. A noteworthy change in the BoJ's approach is the redefinition of the 1.0% 10-year JGB yield cap, now regarded as a reference rather than a strict limit.
The central bank also plans to be more adaptable in managing market operations, determining offer rates for fixed-rate JGB buying operations individually, taking into account various market factors. Furthermore, the BoJ emphasizes the need for strengthening wages and prices within a virtuous economic cycle. It reiterates its dedication to ongoing monetary easing under YCC, aiming to boost economic activity and facilitate wage growth.
This decision underscores the high level of uncertainty currently prevailing in the economy and financial markets. The BoJ's announcement, made just a few hours ago, reflects its commitment to maintaining a flexible and supportive monetary policy as it navigates the challenges presented by today's economic landscape.
AUDJPY - H4 Timeframe
The AUDJPY chart above shows price approaching a key level at the 76% of the Fibonacci retracement, alongside the presence of a drop-base-drop supply zone. The head-and-shoulder pattern and the trendline resistance serve as additional confirmations for the bearish sentiment.
CADJPY - H4 Timeframe
CADJPY is currently at a rally-base-drop supply zone, with the confluence of the resistance trendline, and the 100-day moving average resistance. Based on this, I will uphold a bearish sentiment since the supply zone also overlaps a resistance pivot zone.
NZDJPY - H4 Timeframe
On the 4-Hour chart of NZDJPY, we can see price resting at the 200-day moving average, with further confluence from the trendline resistance, rally-base-drop supply zone, as well as the bearish array of the moving averages.
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