Forex Marketz Daily Forex News – Fully Markets Update
The Japanese yen is trading in a tight range as Forex traders are waiting on the Bank of Japan to meet and announce monetary policy and rates.
The Japanese central bank is expected to make no change to their monetary policy settings but are considering scrapping limits on bond purchases. The Bank of Japan (BOJ) is also considering easing rules that provide funding for companies hurt by the Covid-19 pandemic.
The Japanese yen is trading steady against the U.S. dollar. The headline USD/JPY Forex market is trading at 107.41 yen Monday morning.
The EUR/JPY currency exchange rate is trading near a three year high at 116.29. The Japanese yen is also trading against the commodity currencies like the New Zealand and Australian dollar.
The Yen Trades Steady as Forex Traders Look Towards Central Banks
Forex traders are looking towards central bank meetings this week. First up, on Wednesday, the Federal Reserve Board will announce monetary policy and rates and on Thursday, the European Central Bank will announce their rate and monetary policy decision.
The Federal Reserve has already taken as series of steps to insulate their underlying economy against the Covid-19 contagion and is likely to stand firm this week.
The European Central Bank has a bigger decision. The ECB will likely extend their quantitative easing (QE) program to include junk bonds. This is worrying financial traders that this could widen the political divide in the European Union.
The Bank of Japan will Likely Hold Rates Steady
Japan’s central bank is expected to make no change to their headline refinance rate as that stands at minus 0.1 percent. They will likely keep guidance of the ten (10) year bond yield close to zero percent.
BOJ monetary policy makers are expected to discuss scrapping its target for government debt buying. This means they are showing an interest with purchasing unlimited amounts of debt.
Japan’s economy has been hit hard by the Covid-19 pandemic. The central bank has urged businesses to close and people to stay home and this is severely depressing economic activity in the island nation.
