Volatile session for yen pairs in Asia, with moves beginning ahead of the official BOJ monetary policy announcement. Dollar-yen opened the overnight session around Y89.65, lifting to Y89.88 on an Asahi News article suggesting the Japanese govt and the BOJ had come to an agreement to specify time-frame to get inflation to 2.0%. The early rise was greeted by macro supply, with the move lower given added weight as traders reacted to FinMin Aso comments on inflation targeting sent rate down to Y89.28. The official announcement, BOJ setting inflation target at 2.0% as soon as possible (no time frame mentioned), and to buy Y13tln of assets each monch, including Y2tln JGB’s, spiked dollar-yen to Y90.13, euro-yen to Y120.16 from Y118.84, but the upside momentum quickly faded. Some saw the timeframe as ambiguous, the lag in implementation to Jan 2014 disappointed and led to a sharp reversal. Dollar-yen dropped to Y88.90, with Japanese names the stand out sellers in the move, while euro-yen dropped to Y118.66. Dollar-yen had recovered to trade around Y89.20, euro-yen above Y119.00 into early Europe. Expect further analysis of accompanying comments to dictate direction.
EasyForexNews Research Team