The central bank also said that a majority of members would support a further rate cut in November if the outlook at that time is consistent with the August Inflation Report projections.
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Dollar/yen eases, on track for 0.7 pct weekly loss * Weak US data further reduce US rate hike prospects * Bounce in commodities after rough patch supports Aussie * Focus on BOJ and Fed policy meetings on Sept 20-21 (Updates prices, adds comments) By Masayuki Kitano and Shinichi Saoshiro SINGAPORE/TOKYO, Sept 16 (Reuters) – The dollar eased versus the yen on Friday, struggling to gain traction after lacklustre USA economic data further dampened already low expectations for a Federal Reserve interest rate hike next week.
But the Fed’s preferred inflation gauge, the core personal consumption expenditure price index, will languish below the central bank’s 2 percent goal until the end of 2017, the poll showed. They could also remove their timeline for reaching their 2% inflation target. The city’s Nikkei index ended 0.7 percent lower.
Metropolitan Bank & Trust Co. rose 1.8 percent to P86.90, while food manufacturer Universal Robina Corp. gained 1.5 percent to P183. Canadian retail sales and consumer prices are on the calendar but these reports won’t be released until Friday which means in the first half of the week, CAD will continue to take its cue from the market’s appetite for US dollars and oil.
Elsewhere, the dollar slipped 0.1 per cent to 102.345 yen as the risk off mood benefited the safe-haven Japanese currency.
In the USA, long end rates affect corporate borrowing, and 10-year yields affect corporate borrowers and mortgage rates. The US dollar index retreated from the highest this month after Fed Governor Lael Brainard started the week by saying the case for tighter policy “is less compelling”.
The greenback was flat against a basket of currencies, having hit a one-week high the previous day, just a week before the U.S. Federal Reserve’s next policy meeting begins.
Long-dated USA government bonds were little changed Friday as an overnight rally was snuffed out by a report showing a pickup in inflation last month. U.S. West Texas Intermediate futures were down 0.6 percent, at $43.67 a barrel.
Gold was steady after the resurgence in risk appetite pushed it down 0.7 percent on Thursday.
In Sydney, Woodside Petroleum was down 0.7 percent, while Hong Kong-listed CNOOC shed 1.1 percent and PetroChina lost one percent.
Shanghai fell 0.7 percent and Singapore shed 0.5 percent.
The Federal Reserve made a decision to maintain the federal funds rate steady in the range 0.25 percent to 0.5 percent for the fifth time during the meeting in July. The probability of a Fed rate hike at the September meeting is running at a scant 15%, according to the CME Group’s FedWatch Tool. The Dow Jones industrial average jumped 0.99 percent to end the day at 18,212.48 points and the S&P 500 rallied 1.01 percent to 2,147.26.
The poll forecast the Fed will hike twice more in 2017, taking rates to 1.00-1.25 percent.
The US CPI which measures the cost of living rose more than the forecast in August.
Japanese government bond prices rose on Thursday and the relentless steepening in their yield curve eased as investors looked to the Bank of Japan’s policy meeting next week.
While likely holding the federal funds rate at 0.25-0.50 percent on Wednesday, the Fed could signal in stronger terms that a rate hike is coming, if for no other reason than to prevent complacency in the markets.
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Japan’s 10-year government bond fell a basis point to minus 0.030 per cent after rising close to positive territory earlier in the week.
