HomeContributorsFundamental AnalysisYen Gains Ground, BoJ Summary of Opinions Next

Yen Gains Ground, BoJ Summary of Opinions Next

USD/JPY has posted losses in the Wednesday session, erasing the gains seen on Tuesday. In North American trade, USD/JPY is trading at 113.64, down 0.31% on the day. On the release front, there are no key US events on the schedule. Japan releases Core Machinery Orders and Current Account, and the Bank of Japan will publish its Summary of Opinions.

The BoJ will release its Summary of Opinions later on Wednesday, and the markets are not expecting any dramatic announcements. The Bank has repeated that it does not plan to change its inflation target of around 2 percent, even though inflation is running well below the target. The summary will provide details of the BoJ’s forecasts for inflation and economic growth, and a positive projection could boost the Japanese yen. Earlier in the week, the minutes of the October policy meeting indicated that many board members were satisfied that the inflation target would be met under current policy. BoJ Governor Kuroda echoed this message and called the economic expansion "highly sustainable", and the markets took his optimism as a sign that the BoJ has no plans to inject further stimulus in the near future.

While US President Trump continues his visit to Asian Pacific countries, there is plenty of activity in Congress. After failing to pass a new healthcare act, President Trump has his sights set on tax reform, a key item in his domestic platform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, but that could prove to be too tight of a deadline. Most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. The bill is presently being debated in a congressional committee and is expected to move to the House floor next week. The Senate will present its version of the bill on Thursday, so we can expect plenty of activity in Congress in the next few weeks. Expectations that Trump will cut taxes has been the catalyst for a stock market rally over the past year, and if the bill does become law, the US dollar will likely gain ground.

MarketPulse
MarketPulsehttps://www.marketpulse.com/
MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading