The Japanese yen is generally higher in Asian session on risk aversion. Nikkei followed the sharp decline in US and dropped -254.9 pts, or -1.7%, back below 15000 handle at 14808.85. Hong Kong HSI is also down -140 pts, or 0.62% at the time of writing. The forex markets are relatively steady elsewhere. Commodity currencies are firm against the dollar but stays below last week's high. European majors are mildly higher too, but is also stuck in tight range. The common currency also recovers mildly in crosses against the Sterling, Swiss franc, and Aussie.
There are speculations of additional easing from the BoJ to be announced latter in the quarter, but the yen shrugs off such talks so far. Rate is expected to be kept near zero while the annual target of monetary base expansion would be held at JPY 60-70T tomorrow. There are talks that the BoJ would increase the size of bond purchase or ETFs and most analysts expect the move in July. That's seen targeted at boosting Q3 GDP which would be crucial in decision of another sales tax hike after April.
On the data front, Japan leading indicator dropped mor than expected to 108.5 in February. German industrial production rose 0.4% mom in February. Swiss foreign currency reserves rose to CHF 437.98b in March. Swiss PPI rose back to 0.0% yoy in March, versus expectation of being unchanged at -0.1% yoy. Eurozone Sentix investor confidence will be released later today.
Other than the BoJ policy decision, there are two main central banks events this week. The FOMC minutes would likely provide little thing new to the markets. BoE is expected to keep policies unchanged and issue a brief statement only. The main focus could be on Australia employment as well as a set of China data this week including trade balance, CPI and PPI. Here are some highlights:
- Tuesday: BoJ policy decision; Swiss unemployment, retail sales; UK industrial and manufacturing production; Canada housing starts;
- Wednesday: BoJ monthly report; German trade balance; UK trade balance; FOMC minutes
- Thursday: Australia employment; China trade balance; ECB monthly bulletin; BoE rate decision; UK jobless claims, import price
- Friday: BoJ minutes; China CPI and PPI; UK PPI, U of Michigan sentiments