USD/JPY is showing little movement in the Thursday session. In North American trade, USD/JPY is trading at 113.51, up 0.10% on the day. On the release front, the Bank of Japan maintained monetary policy and held short-term interest rates at -0.10%. In the US, Final GDP in the third quarter came in at 3.2%, just short of the estimate of 3.3%. Other US data was a mix. The Philly Fed Manufacturing Index jumped to 26.2, above the forecast of 21.5 points. Unemployment Claims disappointed, climbing to 245 thousand. This was much higher than the estimate of 232 thousand. Friday also promises to be busy, with the release of three key indicators – Core Durable Goods, New Home Sales and UoM Consumer Sentiment.
There were no surprises from the BoJ, which wrapped up a two-day policy meeting. Policymakers voted to hold record low interest rates and the target for the 10-year government bond yield at zero percent. The BoJ acknowledged stronger economic conditions, saying that the "economy is expanding moderately". A stronger global economy has boosted Japan’s export and manufacturing sectors. However, inflation levels remains well below the BoJ’s target of around 2 percent, and with this trend likely to continue well into 2018 or later, the BoJ is likely to hold the course on interest rate levels and its ultra-accommodative stimulus program. At a news conference, BoJ Governor stressed the importance of reaching the 2% inflation target, adding that the Bank would not "raise interest rates just because the economy is improving."
It was a tight battle, but President Trump and his Republican colleagues are finally celebrating their landmark tax reform legislation, marking Trump’s first major legislative victory in office. On Wednesday, the House of Representatives voted to pass Trump’s tax reform bill, after it narrowly passed in the Senate, by a vote of 51-48. Trump is expected to sign the bill into law next week. The tax legislation marks the first major overhaul of the US tax code in 30 years, and reduces corporate taxes from 35% to 21%. After failing to overturn Obamacare, the Republicans finally scored a big win, and will now have to sell the tax plan to a skeptical public, with congressional elections slated for November 2018.
