Asian Session Forex Recap – Dec. 18, 2015

  • NZ ANZ business confidence: 23 vs. 14.5 previous
  • BOJ announces additional easing measures

The yen dominated the forex show during the Asian session, as traders priced in the BOJ’s surprising (but disappointing) additional easing measures.

Major Events:

BOJ policy changes and press conference – There was a lot of hullabaloo surrounding the Bank of Japan (BOJ)’s last monetary policy decision of the year. If you recall, many market players weren’t expecting the central bank to make any changes.

The BOJ did end up making changes but they turned out to be as disappointing as getting a lump of coal for the holidays. Here are some points you need to know about today’s event:

  • The BOJ kept its rates steady and kept its monetary base target of around 80 trillion JPY a year.
  • The BOJ will extend the average maturity of its Japan government bonds (JGBs) from 7-10 years to 7-12 years.
  • Starting in April, the BOJ will buy an additional 300 billion JPY worth of exchange-traded funds (ETF). This is in addition to the central bank’s current program of around 3 trillion JPY per year and is designed to offset the bank’s decision to sell its purchased stocks back in 2002.

Dollar’s rally at an end? – Okay, not really. But we might be seeing a bit of a pause and some profit-taking after the previous sessions’ dollar rallies. For now, the Greenback has across the board despite a lack of market-moving economic data.

Major Currency Movers:

JPY – The yen was initially sold across the board as soon as the first headlines hit the newswires. Unfortunately for the bears, market players soon shared how underwhelmed they are and demand for the yen took a positive turn.

USD/JPY popped up to a high of 123.54 before dropping back down to 122.30 while EUR/JPY hit a high of 133.78 before levelling off to 132.66. Even GBP/JPY popped up to 183.9 before quickly settling down to 182.44.

USD – EUR/USD rose by 42 pips (+0.39%) while GBP/USD popped up by 32 pips (+0.22%) and USD/CHF slid by 35 pips (-0.35%). Even the comdolls got a few pips in with AUD/USD rising by 18 pips (+0.25%), USD/CAD slipping by 21 pips (-0.15%), and NZD/USD inching above the .6700 major psychological handle.

Watch Out For:

  • 9:00 am GMT: German Ifo business climate (109.2 expected vs. 109.0 previous)
  • 9:30 am GMT: U.K. retail sales (0.6% expected vs. -0.6% previous)
  • 11:00 am GMT: CBI industrial order expectations (-9 expected vs. -11 previous)

See more:

U.S. Session Forex Recap

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