{"id":143708,"date":"2019-03-15T11:19:01","date_gmt":"2019-03-15T15:19:01","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=143708"},"modified":"2019-03-15T11:19:01","modified_gmt":"2019-03-15T15:19:01","slug":"boj-keeps-rates-on-hold-citing-global-slowdown","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/03\/boj-keeps-rates-on-hold-citing-global-slowdown\/","title":{"rendered":"BOJ Keeps Rates On Hold Citing Global Slowdown"},"content":{"rendered":"
March 15, 2019<\/div>
\r\n<\/div><\/div>

By <\/strong>Orbex<\/strong><\/a><\/p>\n

The Bank of Japan kept its monetary policy unchanged at its February meeting held yesterday. While the decision was broadly expected, the market was somewhat taken back by the dovish shift in the BOJ\u2019s commentary.<\/p>\n

In the statement issued alongside the monetary policy decision, the BOJ noted that it is now far more pessimistic about the domestic economic recovery and the health of the global economy.<\/p>\n

Global Slowdown Weighing on Exports<\/strong><\/h2>\n

The bank has previously expressed its view that strong exports and factory output will keep growth momentum in place. However, it tempered this view this time around in light of recent global growth concerns.<\/p>\n

The BOJ has now reduced its assessment on foreign economies in light of the slowdown and heightened political uncertainty in Europe. The bank stated that \u201cexports and production<\/a>\u00a0have been affected by the slowdown in overseas economies.\u201d<\/p>\n

However, the BOJ chief did say that it feels the economy will \u201ccontinue its moderate expansion, despite being affected by the slowdown in overseas economies for the time being.\u201d<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Kuroda expanded on this, saying;<\/p>\n

\u201cIt is true Japan\u2019s exports and output are being affected by lean overseas growth. On the other hand, domestic demand continues to grow. We maintain our baseline view that the economy is expanding moderately.\u201d<\/p><\/blockquote>\n

Kuroda: Output Gap is Improving<\/strong><\/h2>\n

Kuroda went into further detail about the bank\u2019s economic outlook, stating:<\/p>\n

\u201cIt is likely to take longer to achieve our price target. However, the output gap is improving \u2026 Most board members think it\u2019s more appropriate to patiently maintain our current stimulus programme.\u201d<\/p><\/blockquote>\n

However, the BOJ chief was quick to add:<\/p>\n

\u201cWe are not saying that we only care about achieving our price target. Our goal is that prices should rise gradually, reflecting an improvement in corporate profit and job growth rate \u2026 We also need to keep in mind the impact our policy has over market functioning and financial intermediation.\u201d<\/p><\/blockquote>\n

In terms of the global outlook, Kuroda tempered earlier comments by saying:<\/p>\n

\u201cThe chance of overseas economies worsening further is low. It\u2019s a risk. However, the baseline scenario is for overseas economies to pick up in the latter half of this year, particularly areas that are currently witnessing signs of weakness such as China and Europe.\u201d<\/p><\/blockquote>\n

Kuroda Defends Negative Rates<\/strong><\/h2>\n

The BOJ continues to come under criticism. This is due its decade long easing program involving both negative rates and a massive quantitative easing program, in addition to its recently introduced yield curve control program.<\/p>\n

Despite the criticism, Kuroda and co remain resolute in their commitment to maintaining an easing presence despite inflation still being\u00a0nowhere near target<\/a>.<\/p>\n

Commenting on the issue of negative rates, Kuroda told reporters:<\/p>\n

\u201cMany European countries maintain negative interest rates and apply them to a pretty big pool of funds \u2026 In Japan, we only apply minus 0.1 percent negative rates and only to a small portion.\u201d<\/p><\/blockquote>\n

Technical Perspective<\/strong><\/h2>\n

\"eurjpy\"<\/a><\/p>\n

EURJPY is now trading back above the 125.46 level, which was a major support level in 2018. If price can break back above the 2019 lows, bulls will be looking for a challenge of the bearish trend line from 2018 highs next. 125.46 should now hold as support once again if retested.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex The Bank of Japan kept its monetary policy unchanged at its February meeting held yesterday. While the decision was broadly expected, the market was somewhat taken back by the dovish shift in the BOJ\u2019s commentary. In the statement issued alongside the monetary policy decision, the BOJ noted that it is now far more […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-143708","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=143708"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143708\/revisions"}],"predecessor-version":[{"id":143710,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/143708\/revisions\/143710"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=143708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=143708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=143708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}