Market Overview

ForexLive Asia Wrap Thursday 20 Dec 2012: BOJ Expands Asset Purchase Program– Inflation Target Unchanged

Data/eco/comments:

The BOJ expanded its asset purchase program by Y10Tr, but delayed any commitment to a new inflation target for discussion at its January meeting
New Zealand Q3 GDP +0.2% (vs. +0.4% expected)
New Zealand December ANZ Business Confidence falls to 22.7 (vs. 26.4 in November)
Australia: The RBA slowed its pace of $A sales in Nov. to A$117 million (outright AUD sales lowest in 5 months), revealed the December Quarter RBA Bulletin
Australia: Treasurer Swan said a budget surplus this year was 'unlikely', effectively dumping the government's commitment to the surplus

USD/JPY and EUR/JPY had big falls just after 5pm New York time; profit-taking on short Yen positions seemingly the reason. The rebound (from 83.94 low) was sharp, finding resistance just above 84.30 and settling at 84.20 until the BOJ announcement in the Tokyo afternoon. There was a volatile reaction to the announcement, up to 84.38 and down to 83.98, but USD/JPY settled within minutes just below 84.20 again.

EUR/USD was peppered with adverse headlines in the late New York hours, from comments from the Greek Finance Minister saying Greece faced a 'make or break year' (FT article, may be gated), to reports that the White House was telling business leaders that Cliff talks had 'regressed'. The headlines took their toll, EUR/USD falling away at the end of an already weak session to a 1.3189 low. It recovered to 1.3220, sitting just above there for the balance of the session.

NZD/USD lost ground on the release of the poor GDP figures; gapping from 0.8360 to a low of 0.8331 before filling in and settling 0.8338/52 for the balance of the session.
AUD/USD slid through the 1.0470 level, but failed to fall much further. It found some support on the announcement of a 0315GMT press conference from Australian Treasurer Wayne Swan, (where it was expected he would dump the surplus commitment), and then ticked  slightly higher in the hours following: 1.0480 as I type.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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