According to the recent statement made by Haruhiko Kuroda, Governor of the Bank of Japan, the central bank is ready to act if there are any new deflation threats. The thing is that the central bankers are seriously concerned that deflation may come as the result of currently volatile markets.
Experts say that the Bank of Japan gave us to understand that a stronger yen coupled with a weaker Japanese stock market may eventually force the central bank into easing its monetary policy.
During his recent speech made in the Japanese parliament, Mr. Kuroda underlined the fact that the central banks’ current policy has nothing to do with the current state of affairs in the domestic stock market as well as the Japanese Yen exchange rate.
Still, the bank is determined to start acting in case the local business climate is in jeopardy and the domestic stock market is compromised amid deflation risks. It should also be noted that this is the key reason why the Bank of Japan decided to expand its QE program in January 2016 the way it did in October 2014. He stressed that it is too early to expect the end of the easing program.
FOREX
Masterforex-V Academy reports the Japanese Yen keeps on showing weakness again the U.S. Dollar, which means USDJPY is rallying within the scope of a long-term trend. The closest levels of support are 110.97, 110.51/15, 109.18, 108.36, 107.03, 106.65. The top of the descending MF sloping channel and MF pivot 121.68 are acting as major levels of resistance.
