The Japanese Comeback; Germany On Edge of Recession

Economic sentiment will be released this morning in Europe; Germany and will be closely watched as the domestic situation edges nearer to recession. EUR Traders should keep an eye on the Spanish trade balance, which may recede further.

Japan’s Nikkei lost 0.31per cent. The Yen rose on the release of the BoJ minutes, which reaffirmed that Japan will not buy foreign bonds to further stimulate its economy and weaken the currency. However the BoJ is considering the purchase of its own government issued bonds, in an asset buying plan for the long term which could counter deflation. The other interesting factor to come out of the central bank policy meeting, was that the BoJ is not considering quelling a law that would guarantee the independence of the Central Bank of Japan. The new PM Shinzo Abe had mentioned that this was something he would consider doing if the BoJ failed to increase its inflation target to his own figure of 2%.

The Reserve Bank of Australia also released their minutes after the monetary policy meeting, which demonstrated that it is taking time over its rate cuts, to see how they will affect Australian economy.

Stocks
The Japanese central bank minutes affected Australia and Japan in different ways. The Aussie S&P/ASX200 rose by 0.36 percent, while the Nikkei 225 in Japan slumped 0.31 percent. New Zealand's NZSE 50 gained by 0.71 percent ahead of the PPI report due to be released today, which will measure consumer inflation.

Forex
After the ECB’s President Mario Draghi commented on how the EUR’s exchange rate could affect the banks future inflation rates, the EUR/USD dropped by 0.04 per cent, a new three-week low. The AUD/USD gained 0.24per cent after the Bank of Australia's minutes were released. However, the real winner in the currency wars was the USD/JPY pair which dropped 0.53 per cent after the statement made by Japan's Finance Minister, Taro Aso.

Commodities
Crude Oil was traded lower at 0.57per cent drop, over lingering worries about global economic growth. Silver and Gold made a short term comeback. Both gained 0.42per cent and 0.19per cent respectively. Natural gas rose .33per cent on the back of positive weather forecasts.