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Forex Flash: Will BoJ monetary policy impact China? – Deutsche Bank

FXstreet.com (Barcelona) - With the BoJ aggressively on the front foot there are considerable discussions on what a weaker JPY means for various economies. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Given new assumptions on Japan's GDP growth and inflation, we think the aggressive monetary easing by the BoJ will lift Chinese export growth by 1ppt and China's GDP growth by 0.1ppt.”

Moreover, “the impact on RMB/USD will likely be minimal and Japanese QE may slightly boost net capital inflows to China via carry trades. The aggressive easing is also spurring a flurry of activity in domestic JPY credit markets.” they add. The Nikkei is reporting that a number of Japanese companies are rushing to issue JPY bonds to take advantage of the recent compression in credit spreads and the low bond yields in the wake of the BoJ's announcement last week. This mirrors a similar pattern to that seen in the US.

Forex Flash: GBP/USD could test 1.5400 in near-term – RBS

The Bank of England left both the level of its asset purchases (£375bn) and the policy rate unchanged at 0.50%. This was largely expected given that the BoE is unlikely to have received sufficient new information over the past month to warrant a change of policy in April. The less dovish tone to the March minutes, some backtracking over the effectiveness of QE from some MPC members and worries over the pace of GBP’s depreciation would also seem to point to a repeat of the 6-3 vote in favor of holding policy unchanged. However, we will have to wait until the minutes are released on 17th April to see the discussion and voting pattern.
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Forex Flash: USD/JPY may see downside ahead - Societe Generale

Sebastien Galy, Senior FX strategist at Societe Generale notes that of late he is particularly focused on the potential range for USD/JPY looking forward.
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