HALISTER1: BOJ May Hold Back Intervention Until 105 in USD/JPY: BK Asset

BOJ May Hold Back Intervention Until 105 in USD/JPY: BK Asset

(Bloomberg) -- BOJ is clearly passing the baton to PM Abe and pressuring the government for more aggressive fiscal stimulus, BK Asset Management managing director Kathy Lien writes in note received Friday.
  • BOJ not intervening in April and pass on cutting rates yesterday, means they won’t be intervening unless USD/JPY drops to 105, Lien says
  • If USD/JPY breaks below April low of 107.63, next stop will be 106.65, which is 38.2% Fibonacci retracement of the 2011 to 2015 rally: Lien
  • Main takeaway from BOJ meeting is they feel no immediate pressure to use monetary policy or currency intervention to turn around the economy.
  • BOJ have done enough for the time being and wants to see how the economy reacts first, while warning they are still on track to increase stimulus this year especially after weak inflation numbers
  • USD/JPY down 0.1% to 108.05
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kathy Lien (Bk Asset Management)

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