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Flash: BoJ cannot stop now – Westpac

FXstreet.com (Barcelona) - Volatility in the previously sleepy Japanese government bond market has exploded since Bank of Japan governor Kuroda took the reins and this is by no means irrational.

On the positive side for JGBs, the BoJ’s aggressive version of quantitative easing is projected to see it buy a net JGB50 trillion (almost $500bn) in JGBs annualized until at least end-2014. If the central bank is a regular, massive buyer of JGBs then why worry?

According to Global FX Strategist Sean Callow at Westpac, “The obvious problem is that as it buys JGBs through money created by simply raising the balance of accounts held by the banks that own the JGBs, the BoJ is trying to generate inflation. “If the economy continues to suffer deflation of near -1%, then the 0.8% yield on a 10-year JGB at the start of this year was not a bad ‘real’ return.

Commodities Brief – Precious metals breakout, silver capped by 23.00 resistance

The yellow metal surged against a waning USD during US trading Thursday, after which the recent tranche of economic data came in soft. After trading positively throughout European trading earlier, the price managed to edge higher, clearly solidifying itself above the key 1400 barrier. At the time of writing, the price of gold has risen to test intraday highs lows at USD $1414.28 per oz. The next upside target is 1445, a break of which will reiterate the bullish trend that seems to have engulfed the metal.
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Flash: FX majors waiver in outlooks – UBS

UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's majors and outline the technical positions.
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