The Central Bank Postponed The Easing Policy, How Does The Exchange Rate Go Next?

Last Friday, the BoJ lowered its short-term inflation expectations and did not take any additional monetary stimulus measures, which could make bond investors adversely affect future inflation expectations, analysts said.

Investors have further reduced Japanese inflation expectations.

From a technical point of view, the United States and Japan continued to rise yesterday after the opening of the Asia Pacific market, and continued to expand their gains under the favorable factors. From the daily point of view, the short-term average line is heading upward, the middle and long term average line is underneath, the gold fork running on the MACD zero axis is on the top, the middle track of the Bollinger is on the right track, and the upper track is slightly expanded. From the upward direction, the upper resistance 122.00122.55 is seen from the downward direction, and underneath supports 121.00120.50.

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The central bank is still not in a hurry to consider additional easing measures. The real earnings volatility of the yen may not further weaken the yen in the near future, Japanese bonds.

Japan's core CPI inflation is expected to be 1.05% in the next 10 years, down from 1.09% in the previous month.

Two years of inflation expectations rose slightly from 0.91% to 0.94%, and one year's inflation expectations fell from 0.55% last month to 0.53%.

The 10 year average inflation expectation is the lowest since January 2013.

Although core inflation has picked up recently, real core inflation has already put pressure on inflation expectations.

Japan's core CPI inflation in Tokyo also declined sharply in October, suggesting that real inflation might slow down.

Due to the negative impact of falling oil prices, it is expected that the core CPI will rebound in 2016, but the possibility of a decline in core CPI inflation may limit the positive impact of inflation expectations.

The BoJ expects inflation to reach 2% in the second half of fiscal year 2016, and inflation is expected to decline in the first half of fiscal 2016.

Meanwhile, the Bank of Japan stressed that 2% of inflation depends on fluctuations in crude oil prices.

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After the overnight non farm report of October, the bond market accelerated to the argument of the Fed chairman Yellen's Hawk bias on Wednesday.

The US non farm report in October is far ahead of expectations. The number of new jobs has reached a new high of 271 thousand during the year. The unemployment rate has dropped to the lowest level since 2008, and hourly pay has reached the highest growth rate in six years.

After the report was released, the yield of US Treasury bonds rose sharply, and futures traders thought that the probability of raising interest rates by the Federal Reserve in December was significantly increased to 70%, and only 56% before the announcement.

They also expect the second rate hike to advance to 7 or August next year, which was expected to be 9 or October.

Wall Street knowledge this week, Yellen said Wednesday that the US economy is "doing well" and is expected to grow further enough to further improve the labour market and bring inflation back to its medium-term goal of 2%.

She added that if the next message shows that the US economy is in line with expectations, it may be appropriate to act in December.

She reiterated that, after raising interest rates for the first time, it would gradually increase interest rates in an incremental manner.

Traders have been thinking this year that the Fed's real rate hike will be slower than that of its officials.

Although the market is still far from the interest rate predicted by the Fed's so-called "dot map", traders' expectations are beginning to approach the Fed's interest rate raising path.

The situation of "super pigeons" has been greatly reduced, and the market is getting closer. "The prediction of Fed officials," said Steven Englander, global head of Citigroup's G10 foreign exchange strategy.