Bank of Japan likely to keep policy on hold in January

The central bank of Japan is set to meet this week for its rate decision. According to a DBS Bank research report, the Bank of Japan is likely to keep policy on hold this week. Given the positive trade and production data lately, the central bank is expected to upwardly revise its GDP projection a bit in the quarterly economic outlook report.

However, challenges continue to be there for the BoJ to defend its positive inflation forecast of 0.8 percent for FY2017 and 1.4 percent for FY2018, stated DBS Bank. In the meantime, given the robust appreciation of the Japanese yen amidst speculations about QE exit, the governor might attempt to calm down investors, emphasize that the JGB yield curve is well anchored, stated DBS Bank.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Japanese Yen was highly bearish -164.11, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 104.347. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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