Yen remains steady after BoJ kept policies unchanged as widely expected. Interest rate was held near zero while the committee voted 8-1 to keep the size of annual asset purchase at JPY 80T. The central bank maintained that "Japan's economy is expected to continue recovering moderately as a trend." However, "annual consumer inflation is seen moving around zero percent for the time being on declines in energy prices." That's sort of a downgrade from prior description that inflation will "slow for the time being". Some economists noted that the down turn in inflation was likely seen as temporary to BOJ, due to supply side driven decline in oil prices. Thus, there was no perceived immediate need to ease monetary policies further. But, risks were growing for BoJ to push back the two-year time-frame for hitting the 2% inflation target and there could be need to additional stimulus down the road.
Australian dollar is mildly lower after RBA minutes but loss is so far limited. RBA suggested that further rate cuts are warranted but policymakers preferred to see more economic data before implementation. Specifically, the central bank was concerned of the inflating housing market and a rate cut might exacerbate the situation. Yet, the sentence, 'On the basis of the current forecasts for growth and inflation, members were of the view that a case to ease monetary policy further might emerge', signaled that further easing would still be likely. More in RBA To Cut Rates Further Although Housing Prices Threat Remains.
Elsewhere, dollar continues to consolidate ahead of FOMC meeting. Dollar index is still feeling the resistance from 100 handle and is hovering slightly below this level for the moment. Nonetheless, retreat is so far shallow and selling pressure is limited. US equities also rebounded overnight with Dow Jones 30 up 228 pts, or1.29% to close at 17977.42, missing 18000 handle. S&P 500 also rose 27.79 pts, or 1.25% to close at 2081.19. We'd probably see the greenback stays in range before FOMC statement, where focus is on whether Fed will drop the word "patience" to pave the way for rate hike between June and September.
As for today, German ZEW economic sentiment is the main focus in European and is expected to show improvements in March. Eurozone will release Q4 employment and February CPI final. Canada will release manufacturing shipments. US will release housing starts and building permits.