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    USD/JPY: measures by the Bank of Japan were insufficient on 15.02.2016

    The data released today showed that the pace of Japanese economy is slowing down and as well as economic recovery. Business activity index in the service sector fell in December услуг (-0.6% versus the decline of 0.9% in November). Industrial production in December fell by 1.7% and by 1.9% on annual basis. Capacity utilization has decreased respectively (-1.0% in December). GDP in Q4 fell by 1.4%. It seems that measures taken by the government and the Bank of Japan to mitigate monetary policy in the country do not bring desired results.

    However, investors’ reaction to the negative news was reserved. Japanese stock index Nikkei Stock Average showed the highest growth in percentage since September and trading in the Asian session closed with a growth by 7.2%.

    Along with the index Nikkey, the pair USD/JPY has also grown. By the beginning of European session the pair has grown by 50 points. Index Nikkey and the pair USD/JPY have grown due to the increasing activity of the traders and their risk appetite amid the rise in price of commodities and stock markets last Friday.

    Due to the increased risk appetite investors stopped safe-haven currencies trading, such as gold and the Yen.

    Nevertheless, today’s data showed poor state of Japanese economy and proved that measures taken by the Bank of Japan are insufficient. If situation do not improve, the bank of Japan can take additional easing measures at the meeting on 14-15 March.

    Meanwhile, investors’ concern about instability in the global financial markets will prevent the rise in the USD and in the pair USD/JPY. Actions of the Japan Central Bank may not be sufficient to change overall situation in the world markets.


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