Cyprus Lawmakers Decide Today on Deposit Levy, BOJ Leadership Shifts to Kuroda - 19.3.2013

The single currency remains in sideways path against the US dollar between 1.2991/1.2932 since yesterday open, after an eventful weekend due to Cyprus bailout terms requiring bank deposit tax, should it be approved today. The parliamentary negotiations and decision was postponed for today with banks in Cyprus entering in second day of holiday. The initial plan to tax deposits less than 100K by 6.75% would be most probably reduced and recent developments suggest that the one-off tax for deposits more than 100K is likely to be raised from 9.9% to as much as 15%. Asia equities are steady today day as contagion concerns are reduced relative to yesterday on possible bankruptcy of Cyprus. In addition today Shirakawa is leaving the head of the BOJ and new governor Kuroda will take responsibilities tomorrow. NIKKEI 225 climbed back by 2.03% at 12,468.23 and Hang Seng was 0.26% up. The Japanese Yen lost its freshly gained ground on Monday open as the USDJPY early today advanced to 95.74 closing the negative starting gap. Australian dollar versus the greenback also started the week with a negative gap but the currency pair quickly recovered as risk sentiment was back due to fading fears of contagion of the recent European banking crisis. The currency pair has rebounded back to 1.0411 and dropped slightly after RBA released the meeting minutes of the 5th of March decision stating that “...members judged that there would be scope to cut the cash rate further to support demand, should that be necessary.”