Hurricane Sandy to subdue trading ahead of the BOJ meeting
City Index October 29, 2012 12:40 PM
<p>The monster hurricane Sandy that is heading for New York gave the risk trade and Asian Equities a slightly offered tone following the announcement that […]</p>
The monster hurricane Sandy that is heading for New York gave the risk trade and Asian Equities a slightly offered tone following the announcement that the US markets will close both floor and electronic trading. The Japanese finance minister reiterated his comments from last week that he wants bold moves from the BOJ to beat deflation. The market expects the central bank to add around JPY10tn accommodation in its asset purchase program. This is widely priced in. However, there has been talk of the Japanese government asking the BoJ to ease more than JPY20tn. Investors seem to have positioned short JPY approaching the BoJ and might be caught off guard by a disappointing outcome.
The positive surprises to the meeting could be
– Increase the size of the asset purchase program by a larger amount. The BoJ might increase the program size up to close to JPY20tn.
– Introducing a forward guidance that would commit itself to monetary easing in the future.
Supports 1.2880-1.2835-1.2750 | Resistance 1.2980-1.3020-1.3080
Supports 79.40-79.00-78.50 | Resistance 80.35-80.55-80.85
Supports 1.6045-1.5910-1.5885 | Resistance 1.6145-1.6185-1.6215
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