Forex Flash: Economic recovery in Japan shared by the world – UBS

Nakao, Japan's Vice Finance Minister for International Affairs, would not be drawn on the bourgeoning controversy surrounding the G7 overnight, and declined to speculate on the identity of the fabled mystery source. Prime Minister Abe however tried a new approach to justify his economic policy agenda, saying that an economic recovery in Japan should benefit other nations too.

According to Research Analyst Gareth Berry at UBS, “This is similar to the line of argument pursued by Fed Vice Chair Yellen who has previously explained that even though the dollar weakens as a result of Fed bond buying, the sooner the US economy recovers, the sooner the whole world economy will benefit.”

Today, attention is likely to focus on BoE Governor King's press conference, which accompanies the publication of the quarterly inflation report. “Our UK economist expects the Governor to reaffirm the message that the MPC prefers the targeted approach of the Funding for Lending Scheme (versus reactivating the Gilt-purchase program).” Berry adds.