BOJ To bring forward timing of open-ended asset buying, extend duration of JGB’s it buys for monetary easing; to double holdings of JGB’s, ETF’s in two years; BOJ says to extend maturity of JGB’s it buys for monetary easing to 7 years from current 3 years; BOJ to double average duration of its JGB holdings; suspends bank note rule temporarily. The much anticipated release of the BOJ policy announcement prompted strong selling of yen. Dollar-yen, which had closed in NY Wednesday at Y93.08 dipped back to Y92.74 to retest the area of NY lows at Y92.72 as market positioned for a weak Nikkei opening. CTA and fix demand lifted rate off the early lows back above Y93, with a late dip to Y92.78 quickly reversed as the BOJ announced policy. Rate raced back above Y93.00, triggered stops on move through Y93.70 to Y93.84, with a second wave of demand lifting the rate on to Y94.23, currently resting back on Y94.00. Euro-yen was taken from Y119.37 pre announcement level to Y120.90, with rate finding support around Y120.65 on initial corrective pullbacks. Further fall out expected when the main part of Europe begins trading, though focus will move on to the ECB rate decision/ECB Draghi press conference at 1145GMT/1230GMT.
EasyForexNews Research Team