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Today, the main event of the Asian session was a report on monetary policy of the Bank of Japan.
The Bank of Japan left its monetary policy unchanged and promised to keep purchasing assets at an annual pace of 80 trillion yen and retain the yield of the 10-year bond at a near-zero level, as expected. Also, the Bank of Japan cut its inflation forecast. The regulator revised its inflation forecasts and shifted the timeline to achieve its inflation target from fiscal 2018 to fiscal 2019. In its statement, the central bank said that the CPI would be rising, yet slowly.
In general, as forecast, there was nothing in the rhetoric of the Bank of Japan to hold on to, thus the yen reacted to the report by declining. From a technical perspective, the USD/JPY currency pair reached back above 112 and is consolidating at the 50-day moving average level. Quotes are going to remain near these levels, perhaps until data on US GDP are released. These data are expected to be published on Friday.
Amid yesterday's release of the US Energy Information Administration report on oil inventories, oil prices continue rising cautiously today. Gasoline and crude oil inventories have dropped considerably. Brent oil prices have already reached above the local high at $49.90 per barrel. Now considering the technical picture, we might be expecting quotes to be above the $50-51 per barrel area.
A rise in oil helped the ruble to end the day with gains yesterday, but the dollar/ruble pair is still not able to reach a technical target at 58-58.3. There are no fundamental drivers for that right now. However, this week bulls will be given a chance to test the level when statistics on US GDP are released and if these statistics are negative. Though no more significant movements are to be expected. On Monday, a meeting of the OPEC+ agreement members will take place in Saint Petersburg, and it is likely that the market will not waste effort in breaking the key levels before this event.
Ivan Kapustyanskiy, equity analyst at Forex Optimum