BoJ didn’t scare the Yen. Overview for 15.03.2019

USDJPY remains calm after pretty “dark” comments from the Japanese regulator. 

The Japanese Yen is looking stable against the USD on Friday. The current quote for the instrument is 111.66.

This morning, another meeting of the Bank of Japan took place. The key rate remained unchanged, at  0.1%, just as expected. However, the rate is not expected to be revised in the nearest future, because the “soft” monetary policy is necessary to improve the inflation. The QE program also remained the same, 80T Yen.

In the comments that followed, the Japanese regulator gave a “darker” estimation to export and manufacturing parameters and said that external risks were very dangerous for the economy. In January, the Export reduced by 8.4% y/y, which is the greatest decline since October 2016. 

There are concerns that due to external risks (China buys less than usual because of complicated trade situation with the USA), the weak export may influence business sentiment in Japan in a negative way. This, in its turn, may force businesses to reduce investments, capital expenditure, and stop increasing salaries.

However, the Yen was cool after these comments. Despite this, all of the above-mentioned things are very bad for the Japanese currency.