Yen Advances as Risk Appetite Fed, BoJ Rate Decision Approaches

Equity markets were recovering from yesterday’s global selloff, but the mild rebound wasn’t feeding into the yen bid through Tuesday. Instead, broad risk trends were on the rise thanks to a round of infusions by a number of central banks. The Fed’s first TAF infusion of $20 billion and the BoE’s auction of a similar amount would pale in comparison to the ECB’s record-breaking $500 billion injection into the banking system. As for scheduled event risk, there were only a few lower rung sales indicators and the Cabinet Office’s economic report. Nationwide department store sales for November rose 0.9 percent, while Tokyo sales jumped 1.7 percent. For December the government left its overall economic assessment unchanged, though it did downgrade corporate profits and business conditions forecasts.
[I]Written By: John Kicklighter, Currency Analyst for[/I]