June 15 (Bloomberg) -- The Bank of Japan kept interest rates unchanged for a fifth meeting as it awaits more evidence on the economy's strength after consumer prices fell for a third month.
``The Bank of Japan is still nailing down the impact of the February rate hike,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan in Tokyo. ``But some board members will probably dissent from the majority view in July and call for a rate hike, and the central bank will take action in August.''
The yen traded at 123.02 per dollar at 1:04 p.m. in Tokyo from 122.98 before the announcement. Bonds extended gains, sending the yield on Japan's 10-year bond down 3.5 basis points to 1.92 percent.
Since last month, Fukui has indicated that he's concerned Japan's interest rates, the lowest among major economies, could lead to ``inefficient'' investment that hurts future growth.
I think we wcould very well get a BOJ hike in August and that the yen is grossly undervalued. JPY shorts will get squeezed any day and that will be a rough scene for equities.
Overnight: Forex traders watch USD/JPY 123 possible resistance. For JPY September globex traders, watch 0.00828 equivalent. Otherwise, S1 at 0.008215 could be in play and we are back above 123. There has been a slight leveling off with support at 0.008220 building the past 12 hours, but that can change. Keep in mind that higher oil also hurts the Yen, so don't only focus on US yields. For now, shorting the Yen is still the trend.
``The Bank of Japan is still nailing down the impact of the February rate hike,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan in Tokyo. ``But some board members will probably dissent from the majority view in July and call for a rate hike, and the central bank will take action in August.''
The yen traded at 123.02 per dollar at 1:04 p.m. in Tokyo from 122.98 before the announcement. Bonds extended gains, sending the yield on Japan's 10-year bond down 3.5 basis points to 1.92 percent.
Since last month, Fukui has indicated that he's concerned Japan's interest rates, the lowest among major economies, could lead to ``inefficient'' investment that hurts future growth.
I think we wcould very well get a BOJ hike in August and that the yen is grossly undervalued. JPY shorts will get squeezed any day and that will be a rough scene for equities.
Overnight: Forex traders watch USD/JPY 123 possible resistance. For JPY September globex traders, watch 0.00828 equivalent. Otherwise, S1 at 0.008215 could be in play and we are back above 123. There has been a slight leveling off with support at 0.008220 building the past 12 hours, but that can change. Keep in mind that higher oil also hurts the Yen, so don't only focus on US yields. For now, shorting the Yen is still the trend.
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