7 Apr 2015
RBA stands pat, and so will the BoJ – TDS
FXStreet (Barcelona) - RBA left the rates steady while maintaining an easing bias, and with BoJ set to announce its policy decision tonight, FX Strategists at TD Securities expect the Bank of Japan to maintain its policy steady.
Key Quotes
“The Reserve Bank of Australia left the cash rate unchanged at 2.25% but still left the door to easing open. The RBA cited that business lending has picked up but removed reference to the AUD being fundamentally expensive.”
“Nonetheless, the RBA still looks for the terms of trade shock from lower commodity prices to weigh on the currency.”
“AUD bounced sharply higher vs the USD and on the CAD and NZD crosses, but we are inclined to fade these moves with more easing expected down the pipeline.”
“Currently, we expect easing in May but our conviction has waned after the "Board will assess the case for such action at forthcoming meetings".”
“The Bank of Japan will announce its policy decision much later tonight (another meeting is scheduled for the end of April), and like the RBA we expect the BoJ to hold the line (a widely held view) despite growing creeping concerns about deflation.”
“While inflation should continue to ease through mid-year, survey-based measures of inflation expectations remain somewhat elevated. And though it looks increasingly likely that Q1 growth will be quite disappointing, business sentiment remains supportive.”
“Unchanged policy from the BoJ may nudge USDJPY slightly lower within the current range, sustaining the broader consolidation theme here.”
Key Quotes
“The Reserve Bank of Australia left the cash rate unchanged at 2.25% but still left the door to easing open. The RBA cited that business lending has picked up but removed reference to the AUD being fundamentally expensive.”
“Nonetheless, the RBA still looks for the terms of trade shock from lower commodity prices to weigh on the currency.”
“AUD bounced sharply higher vs the USD and on the CAD and NZD crosses, but we are inclined to fade these moves with more easing expected down the pipeline.”
“Currently, we expect easing in May but our conviction has waned after the "Board will assess the case for such action at forthcoming meetings".”
“The Bank of Japan will announce its policy decision much later tonight (another meeting is scheduled for the end of April), and like the RBA we expect the BoJ to hold the line (a widely held view) despite growing creeping concerns about deflation.”
“While inflation should continue to ease through mid-year, survey-based measures of inflation expectations remain somewhat elevated. And though it looks increasingly likely that Q1 growth will be quite disappointing, business sentiment remains supportive.”
“Unchanged policy from the BoJ may nudge USDJPY slightly lower within the current range, sustaining the broader consolidation theme here.”