Forex Flash: JPY depreciation stalls – Deutsche Bank

FXstreet.com (Barcelona) - The pace of JPY depreciation has somewhat stalled with the currency now about 1.9% off the recent lows against the Dollar. Over the last 24 hours BoJ Governor Kuroda has been on the wires reminding us the central bank's determination to achieve a 2% inflation target. At this inaugural press conference yesterday, Kuroda said "we will do whatever we can" to achieve the 2% price target "at the earliest time possible".

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Interestingly the Governor said the BoJ is targeting the domestic economy rather than the JPY, and would abide by the G20 ban on competitive devaluations.” He added that there is no sign of an asset bubble and restated that the central bank could bring forward open-ended asset purchases. Whilst the mandate to inflate is clear, will demographics and Japan's ageing population make such targets difficult to achieve without truly dramatic actions?