The Japanese yen gained against its most-traded counterparts today. Some market analysts explained the rally by the better-than-expected domestic macroeconomic data, while others believed that the dovish stance of the US Federal Reserve helped the currency to gain, especially versus the US dollar.
The Bank of Japan released the Summary of Opinions at the last week’s monetary policy meeting. The central bank signaled that it is ready to ease its already extremely accommodative monetary policy even further if necessary:
If downside risks to economic activity and prices materialize, the Bank should be prepared to make policy responses. Since achieving the price stability target has been delayed, it is not desirable to adopt a stance of not taking actions until a serious crisis occurs. Rather, a stance of taking swift, flexible, and decisive actions, including additional easing, in response to changes in the situation is desirable.
Ministry of Economy, Trade and Industry reported that industrial production fell 0.1% in December from the previous month according to the preliminary estimate. While the reading did not look good by itself, it was better than the median estimate of a 0.5% decline and the November drop by 1.0%.
Ministry of Land, Infrastructure, Transport and Tourism reported that housing starts rose by 2.1% in December from a year ago, matching market expectations exactly. The indicator declined 0.6% in November.
USD/JPY dropped from 109.03 to 108.64 as of 12:00 GMT today. EUR/JPY declined from 125.16 to 124.79. GBP/JPY fell from 142.98 to 142.63, touching the low of 142.30 intraday.
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