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Traders contemplate BOJ timing and TPG Telecom risk premium

Steady trading ranges again appear likely this morning as world markets wait on release of the Bank of Japan’s decision this afternoon.

Traders are ready for any possibility with today’s BOJ decision. However, one possibility is that the immediate market response might be complicated by timing issues. The decision itself will be followed by Mr. Kuroda’s press conference some time later. This may come after the Australian stock market closes. Depending on what the Bank of Japan decides to do, the press conference may provide important insight into future policy direction. The position is further complicated for traders by the Fed decision due at 4am tomorrow. For example, Yen bullishness based on any disappointment over the BOJ failure to provide more stimulus might be outweighed by a clear move towards monetary tightening by the Fed.

TPG Telecom’s share price remains under pressure this morning. Yesterday’s lower than expected earnings guidance for F17 is having a double impact on the stock. Not only are investors downgrading their earnings outlook, they are also re-rating the stock for additional risk. Markets appear to be focussing more on the political risk implied by the extent to which NBN exercises its monopoly power and seeks to recover its full development cost from providers and consumers. 

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