Japan’s central bank governor said that he told the country’s prime minister the bank would conduct a review of its policy tools in March to make sure that it can maintain ultra-loose monetary settings for a long period. Governor Haruhiko Kuroda said he also told Prime Minister Yoshihide Suga that the global economy appeared to be picking up, based on estimates issued by the International Monetary Fund.

 Kuroda told reporters after meeting with Suga that “I explained to the prime minister the Bank of Japan would conduct a review (of its tools) to make its policy more effective and sustainable, and announce the findings at its March rate review.”

The BOJ governor and the prime minister hold meetings every few months as a regular practice to exchange views on the economy and policy.

Governor Haruhiko Kuroda’s comments about the review follow the BOJ’s December announcement that it would assess its policy tools in March as the hit to growth from the pandemic forces the central bank to maintain a huge and extended stimulus programme. He also said Suga did not have any particular comment on the BOJ’s March review and the two did not discuss the Tokyo Olympic Games.

Elsewhere, Japan’s Nikkei went a inch up on Thursday, led by a sharp jump in Uniqlo-operator Fast Retailing, but gains were restricted as investors weighed the sustainability of the benchmark’s recent rally above 30,000.

Soichiro Matsumoto, chief investment officer Japan at Credit Suisse Private Banking said “Investors want to evaluate whether Nikkei’s rally to the psychologically important 30,000 mark reflects the real market or not.” “They are trying to see if the market maintains the momentum toward the end of the fiscal year in March and beyond.”

USD/JPY 4 Hour Chart:

Support: 105.68 (S1), 105.51 (S2), 105.24 (S3).

Resistance: 106.13 (R1), 106.40 (R2), 106.58 (R3).

Nikkie inching up and the speech of Japan’s central bank governor favors yen against greenback. We expect a bearish trend for USD/JPY.