- Haruhiko Kuroda, BoJ Governor
Expectations surrounding future moves of the monetary policy by the Bank of Japan have been diminished recently by a high level of confidence about the economy as well as claims from analysts the central bank will rather tighten its monetary policy, rather than ease it further. Last week's remarks, however, revived these debates, as Kuroda sounded a more positive note than usual regarding further easing action. While he claimed the central bank is ready to act if necessary, the governor went beyond his usual comments by saying there are plenty of tools available to stimulate growth, prompting a slight rise in the Dollar against the Yen. The latest report showed the economy logged annualized growth of 5.9%, while bullish view on inflation and growth pushed expectations for additional easing lower. Despite Kuroda's comments, any fresh easing is unlikely to come anytime soon, as central bank believes the economy will withstands the headwinds from the sales tax hike.
At the same time, the Japanese Yen headed for its first back-to-back weekly gain in more than three month, receiving a boost from a weakness in some of the world's largest economy, while growing tensions in Ukraine spurred demand for havens. The currency has advanced 0.3% since May 9, after the same rise a week earlier, posting the first consecutive gain since January 31. A move below 101.33 will clear the way for 100.60.
© Dukascopy Bank SA