The Optionova Staff Analyzes How the Bank of Japan Affects the Yen
The Bank of Japan has been struggling with a slowing economy and a stubborn inflation rate that does not want to rise higher. None the less, there has been some progress in terms of inflation.
February 13, 2014 (Newswire.com) - Every central bank's job is keep monetary stability and to accomplish this, they have at their disposal different tools that can be used to achieve their goals. The Bank of Japan has been struggling with a slowing economy and a stubborn inflation rate that does not want to rise higher. None the less, there has been some progress in terms of inflation.
As it was expected, the Bank of Japan did not change its forecasts for this year or 2015. The central bank decided to leave its monetary policy unchanged and did not make any adjustments. Lately, the central bank has been having some difficulties lately trying to keep inflation in check, but some progress has been made.
For this year and for the upcoming next two years, the Bank of Japan has kept its monetary policies unchanged. However, the amount of asset purchases and monetary reserves for the central bank may exceed those of the Federal Reserve of the United States during this month. This is no surprise since the FED has been cutting down on asset purchases and it has been shrinking its balance sheet. The president of the Bank of Japan, Mr. Koruda has announced that he is satisfied with the current results in inflation, citing that most probably they will reach their target of 2% by the end of 2016.
Manufacturing activity and orders of new equipment and machines has been growing, showing us that there could be further growth in the Japanese economy. The outlook for GDP growth during this year is of 2.7 percent. This is a modest growth, but it falls in line with the forecasts of other economists. During the tax reform period, some analysts were expecting a slowdown in economic activity in Japan, but business climate has stayed positive. Some even believe that consumers started spending more before the tax hike and this helped propelled the economy.
Inflation is expected to be at 1.3% during this year and for the period from 2015 to 2016 it is expected to reach the 1.9% rate, which is very close to the 2% target of the Bank of Japan. Most analysts and experts agree that these levels could be achievable by the Japanese central bank. Besides, economic optimism should return to the markets again and most probably we will see another positive year for the Nikkei Index.
The expert analysts at the Binary Options Broker Optionova (http://www.optionova.com) agree with the staff at the Masterforex-V World Academy (http://www.masterforex-v.com) that the recent comments and reports by the Bank of Japan did not have a lot of effect on the Japanese Yen. If we take a look at the 4 hour chart of the Dollar versus the Yen, we can notice that the USD/JPY pair has been trading in what technical analysts call a symmetrical triangle. The implications of a symmetrical triangle are that prices may break in any direction away from the triangle. In case we see a downward movement on the pair, then we should pay close attention to the 103.80, 103.44, and 103.14 as our next support levels.