<p>Bank of Japan monetary policy board member Hajime Takata in an interview with Japan’s Nikkei newspaper published on Saturday.</p><ul><li>Japan’s economy is not yet in a phase where the central bank can end yield curve control (YCC)</li><li>too soon to start a discussion about concrete methods of ending yield curve control</li><li> careful messaging would be needed when the time comes </li></ul><p>Takata acknowledged that risks have built due to the prolonged period of ultra-easy policy.</p><p>-</p><p>Takata is basically saying the same as Bank of Japan Governor Kuroda. Kuroda has repeated time and again that current policy is appropriate. This f<a target=“_blank“ href=“https://www.forexlive.com/centralbank/boj-governor-kuroda-says-its-too-early-to-discuss-specifics-on-the-banks-policy-framework-20221206/“ target=“_blank“ rel=“follow“>rom just last week</a>:</p><ul><li>when achieving the inflation target comes in sight the BOJ will likely debate a path towards an exit from easy monetary policy</li><li>at present, though, the benefits of current monetary easing outweighs the costs</li></ul><p>It pays to be aware that there is some murmuring in Japan about trimming back easy policy. From senior officials. As an example:</p><ul class=“text-align-start vertical-align-baseline“><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bojs-tamura-says-policy-should-be-reviewed-says-2-cpi-goal-may-be-too-high-for-japan-20221201/“ rel=“follow“ target=“_blank“ class=“article-link“>BOJ’s Tamura says policy should be reviewed, says 2% CPI goal may be too high for Japan</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/possible-boj-kuroda-replacement-says-the-bank-should-review-its-policy-20221209/“ target=“_blank“ rel=“follow“>Possible BOJ Kuroda replacement says the Bank should review its policy</a></li></ul><p>-</p><p>While an exit from YCC or any other leg of Japan’s current ultra-loose monetary policy is not imminent, its something to watch out for in the new year, most likely some time after Q1. Governor Haruhiko Kuroda’s finishes in April 2023. New blood could bring new ideas. The JPY is seeing a headwind from current policy, especially as most other DM central banks jack rates higher. A change to YCC or any of the other planks of easy policy would be yen supportive, at the margin.</p><p>Bank of Japan monetary policy board member Hajime Takata. Takata is one of two new board members appointed under Prime Minister Kishida.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-november-ppi-74-vs-72-yy-expected-20221209/“ target=“_blank“>US November PPI +7.4% vs +7.2% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/umich-us-december-prelim-consumer-sentiment-591-vs-569-expected-20221209/“ target=“_blank“ draggable=“false“>UMich US December prelim consumer sentiment 59.1 vs 56.9 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/putin-we-will-think-about-oil-output-cuts-20221209/“ target=“_blank“>Putin: We will think about oil output cuts</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-us-oil-rig-count-2-20221209/“ target=“_blank“>Baker Hughes US oil rig count -2</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/could-bank-of-americas-ceo-leave-his-job-to-be-treasury-secretary-20221209/“ target=“_blank“>Could Bank of America’s CEO leave his job to be Treasury Secretary?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/atlanta-fed-q4-gdpnow-tracker-32-vs-34-prior-20221209/“ target=“_blank“>Atlanta Fed Q4 GDPNow tracker +3.2% vs +3.4% prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-october-wholesale-inventories-05-vs-08-expected-20221209/“ target=“_blank“>US October wholesale inventories +0.5% vs +0.8% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinas-xi-advocates-for-yuan-settlement-of-oil-and-gas-trade-with-gulf-states-20221209/“ target=“_blank“ draggable=“false“>China’s Xi advocates for yuan settlement of oil and gas trade with Gulf states</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-governments-public-deficit-will-be-much-higher-in-2023-than-previously-thought-20221209/“ target=“_blank“ draggable=“false“>German government’s public deficit will be much higher in 2023 than previously thought</a></li></ul><p>Markets:</p><ul><li>Gold up $6.50 to $1795</li><li>US 10-year yields up 9.6 bps to 3.59%</li><li>WTI crude oil flat at $71.45 after touching $70.06</li><li>S&P 500 down 0.7%</li><li>NZD leads, CAD lags</li></ul><p>The dollar tried to rally on a hot PPI number for the second month in a row but the skeptics one the day as a brief 75-pip rally in USD was quickly wiped out. The UMich numbers also prompted a rally in USD/JPY and some smaller moves elsewhere but that also didn’t last. The led to some further dollar selling but late in the day there was a paring of those moves as stocks sagged.</p><p>At the end of the day, the moves that are left were mostly minor.</p><p>The larger drama was in the oil market where there was a sixth consecutive day of losses for crude. There had been some gains after tough talk from Putin but a closer look at the comments showed a less-aggressive stance than the headline. WTI tried to break $70.00 and came close but couldn’t break through and that led a quick rebound to the upside and flat trade on the day.</p>

This article was written by Adam Button at www.forexlive.com.

<p>It was a tough one for US equities this week and it ended on a soft note after a back-and-forth session. Today’s hot PPI number and better UMich sentiment raised some questions about whether Fed hikes are working enough to cool inflation and whether Powell could take a hawkish stand next week. I think he’s instead going to push the idea that the Fed will hold rates high for longer rather than the U-turn that’s priced into Fed funds.</p><p>In any case, expect some even bigger moves next week.</p><p>On the day:</p><ul><li>S&P 500 -0.75%</li><li>Nasdaq -0.7%</li><li>Russell 2000 -1.0%</li></ul><p>On the week:</p><ul><li>S&P 500 -3.4%</li><li>Nasdaq -4.0%</li><li>Russell 2000 -4.9%</li></ul>

This article was written by Adam Button at www.forexlive.com.

<p>The NZD/JPY weekly chart is one of the more-interesting ones out there right now as it brushes up against the September high. If that breaks, it will take the pair all the way back to 2015 levels and a time when the pair touched 94.00.</p><p>The general feeling is that yen weakness is over after the spike in USD/JPY to 150.00 but this chart and some others argue that USD weakness is more the case.</p><p>Lately, the antipodean currencies are benefiting from speculation around China reopening and AUD/JPY also posted a decent week.</p><p>The rise in the pair is also reminiscent of the old carry trade. The RBNZ cash rate is now at 4.25% and another 50 bps is expected in February. That’s a hefty carry over zeroed out JPY rates, though risks around global economic growth are high.</p>

This article was written by Adam Button at www.forexlive.com.

<p>The one-year oil curve fell into contango today as front-month prices continued to crumble. I think the focus on the curve structure is overdone, especially with uncertainty about China’s reopening timeline, but that likely kicked off a final press towards $70.</p><p>Bidders just above $70 finally stepped in, some perhaps on hopes for an OPEC leak or Russian action on the weekend. The low was $70.06 and it has quickly rallied to $71.50.</p><p>$70 is also more than just a big round number. US officials have indicated that the want to refill the SPR around $70 and that may act as support.</p>

This article was written by Adam Button at www.forexlive.com.