The US dollar came under pressure after the poor news that yesterday. The USD fell against the JPY after expectations for the US Federal Reserve (Fed) to proceed with the increase in interest rates on September 21 and tightening of monetary policy. The data showed that retail sales fell more than forecast levels in August and expectations for growth of the index of producer prices did not materialize. The change that Fed will tighten monetary policy next week decreased from 15% to 12% due to the declared data. The pair is found around the level at 102 USD/JPY, until Wednesday probably will not observe significant changes in these values resulting in a wait of investors.
The uncertainty about the actions of the Bank of Japan also contributed to the weak market movements. Tokyo should reconsider its current policy, which is expressed in a combination of negative interest rates and a program for the purchase of assets (quantitative easing). On the market there are attitudes that central bankers may reduce interest rates further down into negative territory next week, which remains unlikely. Bank of Japan would increase the program of buying assets by 10 trillion JPY, thus the annual amount will increase to 90 trillion JPY. Even if institution undertake these incentives, it may not have the expected negative effect on the yen as the currency would benefit from the weakened position of its main competitors in the face of the USD, GBP and EUR.
Relatively weak US data yesterday supported the index after the scales tilted to postpone the increase in interest rates in the country. The US indexes Dow Jones and S&P 500 ended the trade in green territory with a growth of respectively 0.99% and 1.01%.