Thursday, 21 September 2017

What’s next? – USDJPY 21.09.17

Posted by Valentine at 11:34 Labels:

USDJPY

The dollar/yen was 0.32 percent higher as of 07:50 GMT on Thursday to trade at 112.57, with the greenback strengthening across the board following signs of further monetary policy adjustments in the United States.

The US dollar index, which measures the greenback against six major rivals, was trading at 92.30 by the time of this writing.

In line with market expectations, the Federal Reserve decided to leave interest rates unchanged in a range between 1.00 percent and 1.25 percent, but hinting on a third rate hike for 2017.

Yellen’s speech boosted expectations for further adjustments, pushing the probability for a December 25 basis points hike to 65.8 percent, according to CME Group’s FedWatch program.

The US central bank also announced that it will start unwinding its massive $4.5 trillion balance sheet in October, marking an end to its post-crisis quantitative easing program.

“The reason for our actions today in beginning to run down the balance sheet is, we think the economy is performing well, and we have confidence in the outlook for the real economy,” said Yellen in a statement that followed the FOMC statement.

Earlier today, the Bank of Japan (BoJ) concluded its September monetary policy encounter, with Governor Kuroda reminding traders that the “central bank will add more stimulus if needed”.

Rates were maintained at minus 0.1 percent, while the 10-year JGBs yield target was left at nearly zero percent. The decision was adopted eight to one.

Ahead in the session, investors will monitor the latest initial jobless claims count at 12:30 GMT and the Philadelphia Fed manufacturing index for September by the same hour. No relevant data is scheduled in Asia.

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