Reuters and Bloomberg both reporting on an interview between Bank of Japan governor with the Sankei daily newspaper 20 Aug 2016

  • BOJ will not rule out deepening cut to negative rates it introduced in Feb
  • there is a sufficient chance the BOJ will add to its easing programme next month

"The degree of negative interest rates introduced by European central banks is bigger than Japan. Technically there definitely is room for a further cut."

Kuroda said in the Sankei interview that the chances are high that the BOJ will reach its inflation target in fiscal 2017, but uncertainties are rising due to the global economic situation. He said there is "technically" room for deeper negative rates while ruling out the use of so-called helicopter money.

Kuroda also told the newspaper the BOJ will consider whether to make any changes to the JPY 80trln per year asset purchases once its comprehensive review of its current mon pol that will be announced in September on the day of its policy meeting.

More from Bloomberg here

Traders and markets will make their own minds up about whether this a more aggressive signal on rate cuts or more hot air. I favour the latter still but we may see some yen weakness on the Asian opening.

What say our wonderful readers at FXL?

USDJPY closed in NY at 100.18 after holding onto 100.00 in a number of session dips.

I'm heading out now to cheer on the mighty Shrimpers of Southend where I'm one of the Club sponsors as well as fan for over 50 years.

Have a great week-end everyone and thanks again for all your brilliant support. I hope my GBP followers took full advantage of yesterday's slide.

Onwards!

Kuroda - Room for further rate cuts