GBPJPY When is Dragon gonna take off: Brexit, BoJ Monetary Polic
Brexit:
Bloomberg: U.K. Prime Minister Theresa May enjoyed a rare good day in Parliament, fighting off her opponents and winning the endorsement of British politicians to seek to delay Brexit day. The result on Thursday means her Brexit plan — which has twice been rejected by huge majorities in the House of Commons — is still in play. The House of Commons voted 412 to 202 to support May’s motion, which sets out how she will ask the European Union to extend the Brexit deadline from March 29 to June 30, if a deal can be reached next week. The motion also opens the door to a potentially much longer postponement. If no Brexit agreement is passed in another parliamentary vote by March 20, more time will be needed to find a solution, and the U.K. will have to take part in European Parliament elections in May, it says. This is aimed at encouraging opponents to back her deal.
However, since the No-Deal Brexit is off the table, Sterling is gaining weight globally..
BoJ:
BoJ left the interest rates unchanged. BoJ wants to keep the easing policy unchanged. Kuroda does not want strong JPY. According to Bloomberg:
The Bank of Japan (BOJ) should adopt an inflation target range as opposed to the current pinpoint target of 2 per cent, former BOJ board member Sayuri Shirai said while talking to Bloomberg earlier today.
Key quotes
BOJ should not abandon inflation targeting as that could lead to a sharp rise in JPY.
Growing view BOJ may need modern monetary accommodation.
BOJ may ease more if JPY surges, resulting in a sharp slowdown in the economy.
Lowering 10-year yield could have a negative impact on the financial system. Instead, the BOJ can expand the 10-year yield’s target range.
BOJ has little options left other than expanding the target range of the 10-year government bond yield.
The big pattern would be validated by the breakout of 149.500
Targets : 153.000, 156.000 158.00 and 160.00
Bloomberg: U.K. Prime Minister Theresa May enjoyed a rare good day in Parliament, fighting off her opponents and winning the endorsement of British politicians to seek to delay Brexit day. The result on Thursday means her Brexit plan — which has twice been rejected by huge majorities in the House of Commons — is still in play. The House of Commons voted 412 to 202 to support May’s motion, which sets out how she will ask the European Union to extend the Brexit deadline from March 29 to June 30, if a deal can be reached next week. The motion also opens the door to a potentially much longer postponement. If no Brexit agreement is passed in another parliamentary vote by March 20, more time will be needed to find a solution, and the U.K. will have to take part in European Parliament elections in May, it says. This is aimed at encouraging opponents to back her deal.
However, since the No-Deal Brexit is off the table, Sterling is gaining weight globally..
BoJ:
BoJ left the interest rates unchanged. BoJ wants to keep the easing policy unchanged. Kuroda does not want strong JPY. According to Bloomberg:
The Bank of Japan (BOJ) should adopt an inflation target range as opposed to the current pinpoint target of 2 per cent, former BOJ board member Sayuri Shirai said while talking to Bloomberg earlier today.
Key quotes
BOJ should not abandon inflation targeting as that could lead to a sharp rise in JPY.
Growing view BOJ may need modern monetary accommodation.
BOJ may ease more if JPY surges, resulting in a sharp slowdown in the economy.
Lowering 10-year yield could have a negative impact on the financial system. Instead, the BOJ can expand the 10-year yield’s target range.
BOJ has little options left other than expanding the target range of the 10-year government bond yield.
The big pattern would be validated by the breakout of 149.500
Targets : 153.000, 156.000 158.00 and 160.00
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