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BoJ Minutes: Moderate Pace For Economic Recovery



The members of the Bank of Japan's monetary policy committee believe that the pace of the country's economic recovery remains moderate, minutes from the bank's policy meeting on January 20 and 21 revealed on Monday. They also noted that capital spending was on the upswing as corporate profits continued to grow. "Japan's economy has continued to recover moderately as a trend, and effects such as those of the decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole. Overseas economies -- mainly advanced economies --have been recovering, albeit with a lackluster performance still seen in part," the minutes said. The members did concede that they were likely to miss their desired inflation target of 2 percent following years of deflation - due mainly to tumbling energy prices. Citing lower crude oil prices, the BoJ downgraded its core inflation estimate for fiscal 2015 to 1 percent from 1.7 percent. But the central bank lifted the forecast for fiscal 2016 to 2.2 percent from 2.1 percent. "Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective," the bank said. "The year-on-year rate of increase in the CPI is likely to slow for the time being, reflecting the decline in energy prices." At the meeting, the BoJ kept its monetary policy unchanged and lowered its near-term inflation forecast. The bank also extended its loan scheme by one year in order to encourage lending. The central bank also decided by an 8-1 vote to maintain its target of raising the monetary base at an annual pace of about JPY 80 trillion. The bank said major risks to the outlook are developments in the emerging and commodity-exporting economies, the prospects regarding the debt problem and the risk of low inflation rates being protracted in Europe, and the pace of recovery in the United States. The bank raised its fiscal 2015 growth outlook to 2.1 percent from 1.5 percent. For fiscal 2016, the bank projected 1.6 percent real growth instead of 1.2 percent. "Quantitative and qualitative monetary easing (QQE) has been exerting its intended effects, and the Bank will continue with the QQE, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," the bank said.

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Japan Corporate Service Prices Rise 3.4% In January



An index measuring corporate Service prices in Japan was up 3.4 percent on year in January, the Bank of Japan said on Tuesday - coming in at 102.3. That was below expectations for an increase of 3.6 percent, which would have been unchanged from the December reading prior to a downward revision to 3.5 percent. On a monthly basis, prices dipped 0.5 percent after easing 0.1 percent in the previous month. Among the individual components, prices were lower for communications, transportation and leasing; they were higher for advertising, machinery repair and real estate.


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Nzd/usd Skips Higher Past 0.7500 to 0.7521, in Line With Aud

0.7534 50% Fibonacci of Jan/Feb decline coupled with 0.7535 overnight top as close resistance


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Fx Vol Collapses: Rbc Capital



The collapse of FX vol that is underway with Yellen and Greece behind us, according to RBC Capital Research. The ECB's Global Hazard Index, at 9.95, is down more than 3 vols from Friday's close and at its lowest level since early-November. With vol and spreads in other asset classes already low, this has caused our overall Risk Aversion Thermometer to fall to almost one standard deviation risk seeking (-7.3) and its lowest level since last May. This is a positive background for riskier and higher-yielding currencies

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New Zealand Jan Money Supply Rises At Slower Rate



New Zealand's money supply growth slowed in January, figures from the Reserve Bank of New Zealand showed Friday. M3 money supply rose 6.2 percent year-on-year to NZ$283.745 billion in January. This follows a 6.3 percent rise in December. In the same month of the previous year, money supply had risen 6.5 percent. On a monthly basis, money supply growth eased to 0.2 percent in January from 1 percent in December.


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Australia Company Operating Profit Dips 0.2% In Q4



Gross operating profits for companies in Australia eased a seasonally adjusted 0.2 percent on quarter in the fourth quarter of 2014, the Australian Bureau of Statistics said on Monday. That was well shy of forecasts for an increase of 0.5 percent, which would have been steady from the previous three months. On a yearly basis, profits tumbled 5.9 percent. Wages and salaries added 0.3 percent on quarter and 0.8 percent on year, the bureau said, while inventories dipped 0.8 percent on quarter and 0.5 percent on year.


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Japan Monetary Base Surges 36.7% In February



The monetary base in Japan spiked 36.7 percent on year in February, the Bank of Japan said on Tuesday, coming in at 275.261 trillion yen. That follows the 37.4 percent annual surge in January. Banknotes in circulation added 3.7 percent on year, while coins in circulation added 0.8 percent. Current account balances climbed 63.6 percent, including a 64.6 percent spike in reserve balances. The adjusted monetary base climbed 43.2 percent on year to 285.688 trillion yen.

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Ecb Will Likely Revise Growth up and Inflation Down



After the announcement of the expanded asset purchase programme (quantitative easing - 'QE') in January, the European Central Bank (ECB) is widely expected to refrain from further new measures in the near term. Thursday's post-meeting press conference will likely focus on the updated ECB staff forecasts for the euro-area economy; Standard Chartered research notes: We expect growth to be revised upwards for 2015 and 2016, and inflation to be revised downwards in 2015. In addition, President Draghi will likely further clarify the QE programme, and may be questioned over how the ECB intends to deal with negative yields and a potential shortfall in sellers; e.g., of German Bunds. He is also likely to comment on Greek banks' access to ECB liquidity operations.

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Eur/jpy on Back Foot in Large Way Overnight, down from 133.89 to 132.41, Await Ecb



Some stops sub-132.50, 132.00, key downside support 130.16 1/26 spike low

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Contraction Accelerates For Australia Construction Sector



The construction sector in Australia contracted at a faster pace in February, the latest survey from the Australian Industry Group showed on Friday, with a Performance of Construction Index score of 43.9. That's down significantly from 45.9 in January, and it moves further beneath the boom-or-bust reading of 50 that separates expansion from contraction. Overall, it's the fourth straight month of decline. Among the individual components of the survey, new orders, activity, employment and deliveries from suppliers all continued to contract. By industry, the heaviest declines came in mining and commercial building - although apartment building swung higher to expansion.

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