The fact that both the BOJ and the ECB suddenly showed additional easing stance after the markets' rout suggests policymakers in Japan and Europe share concerns and take actions, while that wouldn't be a complete solution to fall in oil prices and concerns about slowdown in China, it will ease excessive reactions in markets.

Masafumi Yamamoto

Categorized in : Business

Normalization of monetary policy in the coming months is almost priced in, and the Fed will start shrinking its balance sheet in September, and this does not necessarily mean a delay of rate hikes, this is supporting the dollar as a positive factor, and limiting its downside at the moment.

Masafumi Yamamoto

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This is supporting the dollar as a positive factor, and limiting its downside at the moment, i think Yellen will confirm that rate hikes are coming, and that balance sheet shrinkage will come.

Masafumi Yamamoto

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Nowotny's comments hit the euro just as it was beginning to firm, and the currency could weighed down if other ECB official hint at the need for further easing.

Masafumi Yamamoto

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The latest concerns triggered by the sudden policy action may be subsiding a tad. But there is no change in the fact that the Chinese economy is slowing, i think the yuan has become overvalued as other countries tried to cheapen their currencies and it will keep falling, playing catch-up.

Masafumi Yamamoto

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In addition to the ECB's starting its bond buying, Greek concerns are likely to weigh on the euro again this week, when there are several Greek-related events scheduled.

Masafumi Yamamoto

business

As growth in the upper range of 2 percent is the Fed's prerequisite for an early and sustained rate hike, a figure just around or below 2 percent is likely to hurt expectations for a June hike and weigh on the dollar.

Masafumi Yamamoto

business

The market appears to be relieved for now after Greece asked for a loan extension. But Greece is not promising fiscal austerity and Germany has shown scepticism, the market is used to seeing this by now, but if a deal isn't reached today, the euro could face selling pressure and dollar/yen could also see the same as risk appetite will be hurt.

Masafumi Yamamoto

business

It can be said that the sales tax delay had gained the support of the international community as it was meant to help the economy amid a slowdown, and the downgrade is unlikely to change such views, as for Japanese government bonds (JGBs), which are more directly impacted by downgrades, any effect is likely to be temporary thanks to the Bank of Japan's quantitative easing. Past downgrades have also had little impact on JGBs.

Masafumi Yamamoto

business