Forex News Drop in oil prices brightens outlook for Japanese economy, but implications for monetary policy "probably neutral for now," since decline decreases both upside price risks and downside economic risks that BOJ has described, says Barclays Capital strategist Chotaro Morita. "Although there could be a strengthening bias toward rate hikes if the outlook for growth strengthens going forward, it will likely take some time yet to reach that conclusion." With market reacting to an earlier decline in yields on pessimism surrounding U.S. financial problems, surging oil prices, predicts market will stabilize with 10-year JGB yields in upper-1.6% level. So far today, 10-year yield +2.5 bps at 1.665%.
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