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Forex Flash: Further shift in BoJ polices ala 'gold standard exit' needed - Nomura

Nomura strtegist Yujiro Goto compares the Abenomics with that implemented by the Japanese Finance Minister Takahashi in the 1930s, as also indicated by Finance Minister Mr. Aso.

Yujiro notes: "Inflation and economic growth recovered remarkably under Mr. Takahashi's tenure while asset prices rose and interest rates were anchored. The impressive market reaction and improving economic outlook so far suggest to us that the policy is moving in the right direction, as happened in the 1930s."

The Nomura strategist adds: "However, monetary, fiscal, and FX policy may face a higher hurdle than in the 1930s: the 0 bound for interest rates, necessity of the consumption tax hike, and potential criticism from the international community, for example."

"Clearer changes in the BOJ monetary policy framework under the new BOJ leadership will also be necessary which could be comparable with the then exit from the gold standard. BOJ leadership nominations, scheduled to be announced in a few weeks,
and further changes in policy framework will be very important in this context" Yujiro concludes.

Forex: EUR/USD quiet around 1.3450

EUR/USD is currently dealing with the 1.3450, little moved since late London session, when SNB chairman comments sparkled the single currency to above the 1.3400 handle coming from daily lows at 1.3366, which finally topped for the day at 1.3475 by early NY session, helped on risk appetite. The pair has broken above a neckline around the 1.3420 level, leaving behing a reversed head and shoulders pattern visible up to the 1H chart now targeting the 1.3500 round while above the mentioned neck line.
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Forex: USD/JPY flat around 93.30

With Nikkei index slightly lower for the day around the 11350 points, down -0.19%, and local data better than expected, tertiary industry activity for Japan at +1.4% vs. +0.8% and coming from a -0.4%, best increase in a year, USD/JPY remains mostly unchanged for the Asia-Pacífic session so far at 93.34, while US President Obama adresses the state of the union speech.
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