BOJ’s Shirakawa on the wires…

Speaking at a press conference, BOJ governor Shirakawa made the following comments:

• Steps not aimed at affecting forex.
• 3 month fund supply has had positive effect on stocks and forex.
• The latest steps may eventually have an influence on forex through economic improvement.
• BOJ aims to support demand by pushing down long term rates.
• Latest step is additional monetary easing.
• Wants broad understanding of BOJ’s easy stance to boost economy.
• Japanese economy is somewhat overshooting BOJ’s forecasts.
• BOJ’s steps aimed at ensuring economy, price recovery.
• Short term market moves should not guide central bank policy.
• It will take time for prices to return to desirable level.
• BOJ policy alone cannot help beat deflation.
• There is no miracle step that would lift prices.
• BOJ will examine effects and drawbacks of each step in guiding monetary policy.
• A split vote will not hurt BOJ credibility.

Japanese Overnight Call Rate

The BOJ, as expected, kept the overnight call rate at 0.10%; the result of a unanimous decision by the BOJ. In addition, the BOJ released the following statements:

• BOJ maintains its economic assessment.
• It will maintain very easy monetary conditions.
• It is important to pull Japan out of deflation.
• The fall of annual core consumer prices are narrowing.
• Policy board decision on expanding fixed rate funding operation was by a vote of 5-2; members Noda, and Suda voted against expanding the fixed rate funding operation.
• Japan’s economy is picking up but domestic demand lacks momentum.

Following the release of these announcements, the JPY gained nearly 40 pips against the USD, EUR, and GBP.

Forex Midday Report - March 16

Forex Morning Report - March 16

Bobbys Corner-Open Market-March.16.2010

Good Morning:

Euro Zone finance ministers worked out a bailout program for Greece.  The program  is of emergency loans, should the austerity plan of lowering wages and raising taxes does not do enough to reign in the Greek budget deficit.
Also- a report that showed German investor confidence dropped less than expected also helped ther Euro in overnight trading. 

The FOMC will announce their rate decision at 2:15 PM (NY Time).  Interest rates are expected to be kept at record lows to sustain the economic recovery.

World equity markets rose, as the EU comes up with a plan for Greece, and that the US will keep interest rates steady.
US Futures are also pointing to a higher opening this morning.

Oil:$80.02                                         Gold:$1113.20

HAVE A GREAT DAY & GOOD LUCK

Eurozone CPI

Released at the same time as the German ZEW sentiment number was CPI data also out of the eurozone, whose reading was in line with its forecast.

• CPI (y/y) - Survey: 0.9%   Actual: 0.9%   Prior: 0.9%
• Core CPI (y/y) - Survey: 0.8%   Actual: 0.8%   Prior: 0.9%

German and Eurozone ZEW Economic Sentiment

The EUR traded higher across the board, and made a new high session high against the USD after the release of a  better than expected ZEW economic sentiment out of Germany.  Additionally, the ZEW economic sentiment number for the eurozone was lower at 37.9. The details are as follows:

• German ZEW Economic Sentiment - Survey: 43.5   Actual: 44.5   Prior: 45.1
• Eurozone ZEW Economic Sentiment - Survey: 40.1   Actual: 37.9    Prior: 40.2

Wolfgang Franz, the ZEW President has made the following comments:

• Export oriented industries will drive economic growth.
• German business activity has moved from intensive care to rehad.
• German economy is still far from a full recovery.
• The market has priced in all Greek problems.
• There might be some expectation of a bailout for Greece, but cannot say for sure.
• Inflation expectations are going down; point to a more moderate growth path.

UK DCLG HPI y/y

The market was not impressed by a much better than expected HPI number out of the UK as it had no reaction to the 6.2% reading for February; the forecast was 3.6% and the prior reading was 2.9%. The GBP is currently trading at 1.5057, up from 1.4977 two hours ago.