Last week's central bank action included the Bank of Japan or BOJ and the RBNZ releasing their respective rate decisions in which both central banks left their benchmark rates unchanged.

Nevertheless, the BOJ announced details of its new debt buyback easing measures and RBNZ Governor Bollard came across as hawkish in the associated Rate Statement.

The market will now be closely watching the upcoming FOMC Rate Decision

BOJ Leaves Rates Unchanged but Details Easing Measures and Moves Meeting

USDJPY also fell sharply last Thursday after the BOJ decided to leave its benchmark Overnight Call Rate at a range of between 0 to 0.10%.

This decision to leave rates near the zero mark was widely expected by the forex market.

Furthermore, in the BOJ's Monetary Policy Statement released along with the rate announcement, the central bank announced details of its plans for the Japanese 5T Yen quantitative easing debt buyback program.

The new measures will involve the purchase of assets which include up to 1.5T Yen in government bond purchases and up to 2T Yen in short term government securities.

In addition to the government bond purchase program, another 0.5T Yen will be allocated for the purchase of Yen denominated corporate bonds and commercial paper, while 0.5T will be set aside for Japanese REITs and 0.45T Yen for ETFs.

Nevertheless, an interesting factor remains that the BOJ has moved up its next tentatively scheduled monetary policy meeting to this coming Thursday, November 4^th. This timing immediately follows the next FOMC meeting on November 3^rd that will be closely scrutinized by the forex market for details of anticipated additional quantitative easing measures by the Fed.

RBNZ Leaves Rates Unchanged but Releases Hawkish Statements

In last Wednesday's Rate Decision announcement, the Reserve Bank of New Zealand left its benchmark Overnight Cash Rate unchanged at 3.00%, as was widely expected.

Although it left rates unchanged, New Zealand's central bank nevertheless made some notably hawkish comments in its associated Rate Statement that took the Kiwi sharply higher.

In the RBNZ's most recent Rate Statement released along with its Rate Decision last Wednesday, RBNZ Governor Alan Bollard noted that,

"Despite some data turning out weaker than projected, the medium-term outlook for the New Zealand economy remains broadly in line with that assumed at the time of the September Monetary Policy Statement."

Bollard also added that,

"While it is appropriate to keep the OCR on hold today, it remains likely that further removal of monetary policy support will be required at some stage."

The forex market took these comments by Governor Bollard as indicative of continued strength in the New Zealand economy that may well warrant interest rates rises in the near future.

Central Bank Activity Coming Up This Week

The coming week is especially busy in terms of interest rate decisions from major central banks.

To begin with, the RBA will release its latest Rate Decision this coming Tuesday, November 2^nd. In it, the Australian central bank is expected to keep its Cash Rate unchanged at the 4.50% level. Also, the associated Rate Statement will be looked over for any signs of tightening intentions.

Nevertheless, this coming week's central bank activity will focus on the FOMC Rate Decision scheduled to be released on Wednesday, November 3^rd. In it, the Federal Reserve is widely expected to leave its benchmark Fed Funds Rate unchanged at below 0.25%. Nevertheless, the forex market will be closely scrutinizing the FOMC's associated Rate Statement for any further signs of easing on behalf of the U.S. central bank.

Last Thursday, the Wall Street Journal published an article which forecast that the new QE II measures that the market currently expects will be announced next week by the Fed would take a "measured approach". This indicated that only several hundred billion dollars of U.S. Treasury Bond purchases might take place over the next few months instead of the previously estimated trillion dollars or more.

In addition, the BOJ has tentatively moved up its next Rate Decision, statement and press conference to Thursday, November 4^th of this coming week. This timing immediately follows the upcoming FOMC meeting on November 3^rd. The BOJ will also release its Monetary Policy Meeting Minutes on November 1^st.

Finally, the Bank of England will announce its next Rate Decision on November 4^th where it is expected to keep its benchmark Official Bank Rate steady at 0.50% and its asset purchase facility constant at the 200B level. Also on November 4^th, the ECB is expected to leave its Minimum Bid Rate unchanged at 1.00% on the same day.