Published On: Fri, Jun 19th, 2015

Yen unperturbed by BOJ, a data-thin EUR calendar

FXStreet (Mumbai) – The Bank of Japan (BOJ) monetary policy decision turned out to be a non-event as widely anticipated, with the central bank keeping monetary policy settings unchanged. USD/JPY hovers around 123 handle post BOJ release. While the Antipodeans currencies witnessed fresh selling pressure as the US dollar turned positive versus its major competitors.

Key headlines in Asia

BOJ keeps monetary policy steady

Eurogroup meeting concludes with no deal for Greece

NZ Consumer confidence deteriorates in June

Dominating themes in Asia – centered on JPY, AUD, NZD

A low-key affair in Asia, with BOJ decision expected to be the main market mover today. However, the BOJ once again disappointed markets, making no changes in its monetary policy outlook. USD/JPY witnessed a brief dip to 122.87 lows immediately after the Bank of Japan (BOJ) unchanged monetary policy decision, although the yen quickly gave back gains and trades slightly higher clinching to 123 handle as the policy brought no surprises.

The Aussie was the biggest loser across the FX board, down nearly -0.30% to trade near 0.7770 levels. The AUD/USD pair fell back in to red after the USD bulls jumped back in to bids, riding higher on the wave of a slew of upbeat macro data released on Thursday. While tumbling iron-ore prices after Chinese steelmakers are deepening the first production cuts in a quarter century exacerbated the pain in the Aussie. The Kiwi mimicked the losses in its OZ counterpart and turned lower near 0.6920 levels.

Meanwhile, Japanese equities are up nearly 0.80% on slightly weaker yen, Australia’s ASX 200 jolted 1.33% higher after analysts at Citi reported that the worst is over and the index is on track to hit 6000 by the end of the year.

Heading into Europe – centered on EUR, GBP

A fairy data-light European calendar, with a few economic data lined up for release. German PPI m/m will kick-start the European session followed by Euro zone current account balance and UK’s public sector borrowing data.

German producer prices of industrial products are expected to tick 0.2% higher month-on-month in May compared to 0.1% a month ago, while remaining a negative 1.1% on an annual basis after negative 1.5% growth reported in April.

Analysts at Rabobank, notes, “We have UK public finances, where expectations are GBP10.0bn in net borrowing, ahead of two Fed speakers, Williams, from booming San Francisco (and hence likely to be hawkish), and Mester; their rhetoric is the only event in the US today.”

Later in the North American session, we only have data from Canada which includes CPI, core CPI figures and retail sales data.

EUR/USD Technicals

Anaylsts at AceTrader explain today’s outlook for the major, “Euro’s rally to 1.1440 yesterday suggests upside bias remains for a re-test of May’s 3-month peak at 1.1467 where a break would confirm mid-term upmove from March’s near 12-year trough at 1.0457 has ‘finally’ resumed and extend gain towards 1.1534 later this month. On the downside, only a daily close below 1.1290/00 would indicate further choppy trading inside 1.1467-1.0819 broad range would continue and may yield another fall towards 1.1204-06.“


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