The Bank of Japan finally did what many in the market has been waiting for

<p>The Bank of Japan finally did what many in the market has been waiting for, and intervened to weaken the yen having seen its currency […]</p>

The Bank of Japan finally did what many in the market has been waiting for, and intervened to weaken the yen having seen its currency strengthen against the US dollar back to March’s earthquake levels.  

GBPUSD
GBP/USD
Range: 1.6335 – 1.6417
Support: 1.6320
Resistance:1.6440
Sterling was caught a bid tone from a stronger PMI (services) number yesterday and hasn’t looked back since. Today at noon, the MPC reports its policy decision. The market is unanimous that the policy rate will remain unchanged at 0.5% and the stock of asset purchases will also remain at £200 billion. We will get a clearer picture of the MPC’s thinking on the economy when the inflation report is released next Wednesday.
EURUSD
EUR/USD
Range: 1.4235-1.4370
Support: 1.4140
Resistance 1.4380
The Spanish bond auction and JCT press conference will be the main drivers of the euro market today. With the ECB having raised rates in July, most expect this meeting to signal no change in either monetary policy or the ECB’s economic assessment. It is viewed that September is when the ECB will have the new set of economic projections and a rate rise in October may be warranted. The main interest in today’s press conference is likely to be the council’s evaluation of the recent EU agreement on Greece.
AUDUSD
USD/JPY
Range: 77.00-80.02
Support: 78.80
Resistance: 80.40

 

The MoF conducted JPY selling intervention overnight although it was acting alone, unlike the universal intervention we saw back on March 18 in response to the post-earthquake surge in JPY. The size of the intervention has however, not been disclosed as yet. The BoJ Governor has issued a statement, saying that ‘the BoJ strongly expects that action taken by the MoF in the FX market will contribute to a stable FX rate formation. There is some suspicion in the market today that the BoJ may alter monetary policy as they cut short the two-day policy meeting by a day.

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