The Bank of Japan left policy entirely unchanged at its meeting overnight, as widely expected. Market focus is now fixed squarely on Europe again as the ECB gears up for the first of two three-year LTROs. Continue reading →

The Eurozone’s finance ministers’ conference call managed to secure fresh resources for the IMF, though again there was a distinct lack of unanimity. Only four non-Eurozone nations agreed to participate. It had been hoped that the fund’s resources could be boosted to EUR200 bn but instead only EUR150 bn was pledged. Continue reading →

North Korean media announced that leader Kim Jong-il died over the weekend, sending USDJPY briefly higher. Officials from Japan and the Republic of Korea stressed that both countries remain on their guard, although the yen recovered when fears of an immediate military reaction receded. Although Kim Jong-il had already picked his third son Kim Jong-un as the next head of state, a smooth leadership transition is by no means guaranteed, and we remain cautious on the yen in the immediate future given the headline risk. Continue reading →

The EUR has traded back above 1.30 amid tight ranges as activity winds down towards the holiday season. Nonetheless there still wasn’t much reason to be cheerful – IMF Chairman Lagarde said that the global economic outlook is gloomy, and no region and country is immune. She said that all countries must take action to improve growth. Continue reading →

ECB member Knot said he expects European leaders will solve the debt crisis as long as the financial rescue fund is increased, Reuters reports, citing a magazine. He added that the Eurozone rescue fund or contribution to the IMF has to be at least EUR1 trn Continue reading →