BOJ Monetary Policy Meeting Produces Nothing New
Written by A Forex View From Afar on Tuesday, April 07, 2009The Bank of Japan policy meeting came and went, but nothing substantial really happened. The bank decided to maintain the overnight call rate at 0.10% - the lowest among the industrialized world – while it expanded, once again, its accepted collateral.
“The yen plunged 80 pips ahead of the interest rate decision, but this was most likely a serial correlation move, since it was seen in the other major pairs too”, TheLFB-Forex.com Trade Team said. “The BoJ’s interest rate meetings are really non-events that fail to move to market” they added.
The decision to accept, as eligible collateral, municipal and government bonds will help small and medium banks by increasing their liquidity. This comes after the BoJ began widening its collateral base recently, to facilitate Japanese banks in order to provide credit lines for the business holders and consumers.
TheLFB-Forex.com Trade Team notes, “The Japanese economy is in a bad shape. Some private forecasts point to the economy contracting up to 5% this year, as exports continue to plunge and internal demand slows. Furthermore, the economy is susceptible to external pressure, since exports make up a big percentage of the economy. The correlation between the Japanese GDP and its export market one quarter earlier approached 70% over the last decade.”
Today, TheLFB-Forex.com Trade Plan paid 80 pips on the yen, in a trade that started during the early Asian session and ended during the mid-European session.
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