The Japanese yen is basically steady after the BoJ left monetary policies unchanged as widely expected. Interest rate was held near zero and the annual target of monetary base expansion was kept at JPY 60-70T. The central bank lowered the growth forecast for the current fiscal year to next March slightly to 1.0%, down from prior forecast of 1.12%. The growth projections for 2015 and 2016 fiscal year were held unchanged at 1.5% and 1.3% respectively. Price forecasts were also left unchanged. Core CPI, after tax adjustment, was projected to be 1.3% in the current fiscal year. BoJ saw inflation to be at 1.9% in fiscal 2015-16 and 2.1% in fiscal 2016-17. The BoJ noted in the statement that the economy is "likely to continue recovering moderately as a trend".
In the meeting minutes released today, RBA noted that "low interest rates were working to support demand." However, the minutes also noted that members thought it's difficult to judge how that would offset the "anticipated substantial decline in mining investment and the effect of planned fiscal consolidation." Also, "household consumption growth appeared to have eased" and "forward-looking indicators had been mixed of late and consistent with only moderate growth in employment." Nonetheless, "forward-looking indicators suggested that further strong growth in residential construction was in prospect, despite some easing of conditions in the established housing market over recent months".
ECB president Draghi told the newly formed European parliament yesterday that quantitative easing "falls squarely" in the central bank's mandate. Meanwhile, "the appreciation that took place since mid-2012 had an impact on price stability," and the exchange rate of Euro "remains an important driver of future inflation in the euro area." Earlier, IMF urged ECB to consider a large-scale asset-purchase as that "can push up inflation by raising consumption and investment across the euro area, and support that trend by reviving the supply and demand for bank credit."
Looking ahead, the economic calendar is busy today. The Swiss will release PPI, UK will release CPI and PPI while Germany will release ZEW in European session. US will release retail sales, Empire state manufacturing and import price index.