Slight Shift In BoJ’s Inflation View
The Bank of Japan left its main policy settings unchanged, but the statement reflects a slight shift in its views on inflation that read as a touch more persistent. However, this subtle change is still too early to drive a hawkish policy shift.

The lack of a policy shift explains why USDJPY is broadly unmoved. It sees underlying inflation increasing, “mainly on the back of improvement in the output gap and a rise in medium- to long-term inflation expectations.”

The BoJ reiterated that it “will not hesitate to take additional easing measures if necessary.” the BoJ’s preference to see a consumption recovery before normalizing policy is intact. Consumer spending remains a downside risk for the central bank on that score.

Change in China Zero Covid Policy?

According to CCTV, a politburo meeting chaired by President Xi reiterated China’s zero-covid policy via increased testing coverage and a higher vaccination rate. That does not signal a more relaxed approach. However, authorities in Shenzhen are allowing businesses to reopen and production to restart as covid cases decline.

That should alleviate concerns about weaker industrial production domestically and global inflation risks, given the city’s importance as a tech manufacturing base. Hence I suspect gold is shifting slightly on the supply chain inflation downgrade.

I bought oil on Shenzhen headline but taking profit now.

Running 
Have a great weekend, folks! This former ” fat boy” ( I dropped 50kg since I started running three years ago ) is off to Hau Hin to train for an upcoming marathon. If you are interested and looking for some motivation, I update my daily 10-15 km runs on my personal Twitter account ( below). You don’t need to follow me but check out #marathontraining. It’s super inspirational.

From Stephen Innes Managing Partner at SPI Asset Management