BOJ's Kuroda outlook.Recap for 14.09.2015
Today Bank Of Japan's leader Kuroda spoke to the media about his view and outlook of Japan's economy and about the eventual policy moves from FED on Thursday.
He declined to comment on the US FED decision when asked, which is no surprise, because he can't have an actual negative view on their move, as he stated that any FED hike would suggest confidence in the US economy which is a positive thing for Japan and the global economy. In his words for the FED he also stated on the same topic that emerging economies are less concerned about US FED rate hik triggering capital flight, also he noted that China has plenty of room for policy action for a aftermath of the rate hike and to continue to contain the turmoil in their market.
In short: Japanese economy contracted in Q2, but made a significant growth in Q1 and this growth must be taken into account when assessing the economy. There are growth perspectives for Q3.
Exports and industrial productions are affected by slowdown in the emerging economies and their inflation target of 2% depends on oil prices. CPI is expected to reach (around) 2% in early 2016. QQE policy is to be continued by BOJ until the inflation target of 2% is reached and held stable. Still there were no real hints of their QQE. They only hinted that they will examine upside and downside risks to the economy and prices and will adjust policy as needed. BOJ will continue to closely watch financial market and global economic outlook.
Overall as expected, no change in policy from the Bank of Japan. It seems they can't make any new reasonable changes that they can impact the slow industrial production and the weakened exports. They are more likely to wait-and-see if the offshore conditions will improve and naturally this influences Japan's economy in a positive way.
USD/JPY made some big moves. There was an initial support at 119.50 from the drop, then the price climbed back to 119.77. Moved down again to 119.67 and to 119.50 and the pair closed at 120.209. Outlook is that price will move down more to 119.267 and then to 117.849. The Nikkei 225 plunged also and finished the day in negative territroy.