The market calms down ahead of the Fed’s statement this evening.
BOJ's Iwata tells there’s no need to purchase US Treasury debt
On Thursday, Bank of Japan Deputy Governor Kikuo Iwata told that there is no need to purchase American Treasury debt now. It’s because Japan’s major financial institution is capable of achieving sufficient monetary easing via purchases of Japanese government bonds.
Governor Kikuo Iwata told parliament that the Bank of Japan can easily achieve its 2% inflation objective and it’s currently looking for an eventual exit from its quantitative easing program without purchasing US Treasury debt.
BOJ official stressed that purchasing US Treasury debt would be undoubtedly interpreted as currency intervention, and it falls under the jurisdiction of the country’s finance ministry.
Iwata actually made the comments when asked by an opposition party lawmaker whether Japan’s major financial institution, having dried up market liquidity via its massive purchases of Japanese government bonds, would shift to other steps such as purchasing US Treasury debt.
Follow Canadian core retail sales on September 18 at 15:30 MT time!
The US dollar gained after the Fed’s report, while riskier assets dropped. Let’s have a closer look.
Keep an eye on the UK monetary policy statement on September 17 at 14:00 MT time!