USD/JPY
continued its down move during the session. As I post the low has
been circa 137.26. The yen was boosted by a couple of items out of
Japan. Firstly, there was a media report that the Bank of Japan would
revises its FY2023 inflation forecast above 2% at the meeting on July
27 and 28. The Bank has been insisting, over and over again, that
they see CPI falling from around September/October this year. But if
this expectation is revised away, to a level above the 2% target, a support leg for holding on to
ultra-loose monetary policy is removed. Also during the session was a
piece from Bloomberg (gated) on an interview it did with a former BOJ
chief economist and director Hideo Hayakawa. He said he expected the
Bank of Japan policy board “will make some kind of adjustment to
YCC this month” and that setting the tolerance band for the 10-year
yield from 0.5% either side of zero to 1% is a likely way to adjust
yield control.
While
on central banks, Federal Reserve Board Governor
Christopher Waller spoke on his economic and policy outlook before
the Money Marketeers of New York University during US Eastern time
evening. Check out the posts above for his remarks, but notably he
said that the September Federal Open Market Committee (FOMC) meeting
is live, but if the next two CPI readings “look like the last
two, the data would suggest maybe stopping.”
Current Reserve Bank of Australia Deputy Governor Michele Bullock was announced as the new RBA Governor. Current Gov. Phil Lowe’s term finishes in September, and Bullock takes over on September 18.
Other
news and data flow was light.
While
yen was the mover on the day the USD lost a little more ground
elsewhere, notably against EUR, CAD and NZD. Moves were smaller in
magnitude than in USD/JPY though.