USD/JPY traders made a setback on Monday as the market sees challenges in the form of coronavirus (COVID-19) resurgence and US-China trade war tension. The Bank of Japan’s (BOJ) latest “Summary of Opinions” has also impacted its role to pull the USD/JPY backward.
Reuters has reported that the Bank of Japan can increase transparency and stabilize markets by clarifying the band at which it allows long-term interest rates to move around its 0% target, several views voiced by the board members at its March meeting showed.
“The BOJ must respond rigidly to protect the upper limit of the range” with its newly introduced market operation, one of the nine board members said, according to the summary of opinions released on Monday.”
“Japan’s economy may be shifting away from a downward trend since the outbreak of COVID-19, with exports and output remaining firm,” one of the nine board members said.
“Although uncertainties remain over COVID-19, downside risks to economic activity at home and abroad have been contained with no signs of increase in industries suffering from deteriorating business conditions,” another board member said. On prices, some board members warned that risks of deflation or prolonged price stagnation remained the BOJ’s primary concern, even as some Western economies were experiencing an uptick in inflation, as per the summary.
Worsening coronavirus (COVID-19) conditions in Europe and new virus-led activity restrictions in Australia’s Queensland also puts pressure on the pair.
Alongside, the latest comments from US Trade Representative Katherine Tai, suggesting further US-China trade tussle, also adds the risk in the market sentiment.
Soft Us data past week, Push of US President Joe Biden’s for faster vaccinations on Friday and The chatters on the $3.0 trillion infrastructure plan from US President Biden supports the greenback and improves the market sentiment.
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