Bank Of Japan Keep Monetary Policy Unchanged

BANK OF JAPAN: Japan’s central bank was wrapping up a two-day policy meeting on Tuesday, with most economists expecting it to retain its current, ultra-lax monetary policy. China’s Shanghai Composite Index fell 3.5 percent to 3,005.17. It appreciated 0.7 percent to 135.18 per euro. Australia’s S&P/ASX 200 lost 1.5 percent to 5,018.40. Republication or redistribution of content provided by EconoTimes is expressly prohibited without the prior written consent of EconoTimes, except for personal and non-commercial use.

Sterling edged lower to trade at $1.5420, after data showed United Kingdom inflation subdued in August, tempering the case for a rate hike anytime soon.

The USA stock market drifted lower Monday ahead of a much-anticipated Federal Reserve meeting later this week.

In Europe, investor sentiment has slumped in Germany this month over concerns that sharply slowing growth in emerging markets will hurt the vital export sector of the eurozone’s top economy, a leading survey said Tuesday.

Many economists believe that volatile global markets and increasing evidence of slowing momentum in China will prevent the U.S. central bank from raising interest rates for the first time since 2006.

The latest statement also said the Japanese economy has continued to recover moderately, but noted “exports and production are affected by the slowdown in emerging economies”, reflecting a cautious view over prospects for the economy, which contracted in the April-June quarter.

Soft data readings from Sunday on the industrial output, investment and retail sales combined with a shrinkage in over factory activity and plummeting producer prices, added to fears that the second largest economy in the world and a key driver of the growth globally is headed toward a hard landing.

From Kuroda’s comments, my expectation is there wll be more QE happening after next month’s meeting as all oil prices/emerging market’s economy/exports industry continue to struggle in the coming months. Hong Kong’s Hang Seng index followed the mainland lower and was down by 0.4% at 21,474.59 points.

ENERGY: US crude gained 34 cents to $44.34 a barrel in electronic trading on the New York Mercantile Exchange.

– Wholesale gasoline fell 6.6 cents to close at $1.304 a gallon.

But Jessop estimates that if the spread between the two-year USA and Japanese government bond yields widens to one percentage point – it’s now around 70 basis points – that would justify the yen falling to his end-2016 forecast of 140 against the US dollar, from around 120.20 Wednesday, and thus driving the Nikkei higher.