BOJ Monetary Policy Meeting review and what it means for AUD/JPY

In a continuation of yesterday’s quiet trading conditions in Asia, a muted session overnight with risky assets moving higher on low volumes ahead of a busy second half of the week including earnings reports from major US tech stocks, Google, Apple, and Facebook and central bank meetings.

FOREX 8

Not surprisingly given surging commodity prices and subdued volatility the best-performing currency on the night was the AUD, while the defensive JPY was the worst performer. Bringing into focus the AUD/JPY cross rate post this afternoon's Bank of Japan’s Monetary Policy Meeting (MPM).

Learn more about trading FX

To recap the key outcomes of today’s Bank of Japan (BOJ) meeting, the BOJ maintained the status quo across its monetary policy settings including:

  • Yield curve control (YCC) that allows the 10yr JGB yield to rotate 25bp either size of zero.
  • Its asset purchase programs across JGB’s, ETF’s, J-REIT’s.
  • As well as its forward guidance.

The Bank of Japan also released its quarterly Outlook Report that included marginal upgrades to its FY 2021 and FY 2022 growth forecasts as the drag created by a resurgent virus is offset by stronger than anticipated foreign demand.

As leaked in news reports earlier this week, the BOJ doesn’t expect to see inflation reach its 2% target until after the end of Governor Kuroda’s second term in April 2023 and lowered its FY2021 core CPI forecasts to 0.1% from 0.5% previously.

After an impulsive rally from the November 2020, 73.13 low to the mid-March 85.45 high, AUD/JPY has spent the past six weeks consolidating gains within a contracting triangle, viewed as a continuation pattern. Leaning against this technical structure, traders may consider buying AUD/JPY on a dip back towards triangle support 83.20/00, aware that a break and daily close much below 83.00 would invalidate the bullish setup.

Or alternatively and better yet, buy AUD/JPY on a break and add on a daily close above the twin resistance coming from the downtrend line at 84.50 and last week’s 84.71 high, looking for a rally towards 87.00.

BOJ Monetary Policy Meeting review and what it means for AUDJPY

Source Tradingview. The figures stated areas of the 27th of April 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation


More from AUD

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.