HomeTwo Central Banks in Focus This Week: The BOJ and the US Fed

Two Central Banks in Focus This Week: The BOJ and the US Fed

The Bank of Japan (BOJ) and the US Fed release their monetary policy statements this week, and one day later the US GDP figures will show how much the American economy has grown in the first quarter.

The week ahead is very important for currency traders.

First, it is the last trading week of the month, so Friday’s close will be marked by the end-of-the-month flows in preparation for next week’s jobs report.

Second, the week is packed with important economic events that could move the markets.

The two events that stand out are the BOJ’s monetary policy statement and the Fed’s FOMC statement and press conference.

Key Events in the Last Trading Week of the Month

The BOJ statement is due tomorrow, and this quarterly report is one of the most important economic reports for traders interested in the Japanese yen and the Japanese economy in general. Recently, the Japanese yen strengthened, as seen by the USD/JPY pair declining from above 110. If the BOJ doesn’t signal any concern, traders may send the yen even higher.

One day later, traders are bombarded by market-moving economic data and events: the Australian inflation report, the OPEC meeting, and the ECB president speaking to the Fed meeting.

While no changes are expected from the Fed, any hints about the tapering of asset purchases may reverse the greenback’s weakness seen in the past few weeks.

On Thursday, the Advance GDP in the United States is projected to show a 6.5% quarterly increase. Should we see a bigger economic expansion, the stock market will likely push for new highs.

The week concludes with the Canadian GDP, and the focus will be on how the US dollar ends the month. As usual, volatility will increase when the trading month ends on a Friday, and another trigger for volatility will be the earnings reports of major tech companies including Apple and Facebook.

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