Forex Forecast

JGB Market Groans JGB market can accommodate the size of the BoJ’s ambitions. USDJPY managed to break to a new multi-year high of 97.20, but surrendered gains after trading in JGB futures was temporarily halted.

BoJ First, Then BoE & ECB The Bank of Japan, under its new leadership, took a bolder than expected step into the realm of aggressive easing overnight.

BoJ Two-Day Meeting Begins The Nikkei newspaper reported overnight that the Bank of Japan “will likely” boost asset purchases by about JPY1.2 trn per month.

RBA Stays on Hold The RBA kept its policy rate on hold overnight, fully in line with expectations. The central bank also kept its easing bias,

Euro Drifting Lower Still The Easter holiday in Europe ensured the weekend was relatively free of market-moving headlines.

Cypriot Banks to Re-open All commercial banks in Cyprus are due to open their doors today – in many cases for the first time in 12 days.

The Waiting Game Investors remain in wait-and-see mode ahead of the eventual reopening of banks in Cyprus on Thursday. Meanwhile a familiar theme continues to play out quietly behind the scenes

Kuroda Still Sounding Dovish Newly-installed BoJ Governor Kuroda stuck to the dovish script overnight. Two comments in particular seemed to impress investors sending USDJPY gradually 40 pips higher.

Bailout Deal Finally Inked The troika and the Cypriot government agreed on key elements of a bailout agreement overnight and Eurozone finance ministers subsequently approved it too.