Its been a quiet last trading day of the week in Asian session today with most currencies tracing out narrow ranges as markets were content to simply consolidate the week’s moves. The freshly released BOJ minutes revealed that some members were seeking to increase the CPI target rate to 2% while some said there was no need to substantially change the BOJ policy of “a positive range of 2% or lower, centering around 1%.”
At its February meeting, the BOJ board decided to adopt a more explicit 1% inflation target “goal” and boost its already large-scale unconventional financial asset buying program, prompting yen to weaken further.
USD/JPY had started the session drifting lower in typical Friday risk off flow pattern, but the pair found some support at the 83.25 level after Richmond Fed Jeffrey Lacker suggested that the Fed may raise rates as early as 2013. Mr. Lacker, however, stands in a distinct minority on the FOMC having been the only member to dissent from Fed’s stated policy of keeping rates low for an extended period of time.
With and absolutely event free economic calendar in European session trading in the currency market could remain directionless for much of the morning session. Having hit its year to date highs of 84.20 in yesterday’s North American trade USD/JPY look ready to pause as trader begin to book some profits. If US yields begin to recede fro their recent highs the pair could test the 83.00 figure before the end of the global day.