It’s been a choppy session for USD/JPY since it opened at Y109.21 this morning. Dollar-yen traded a high of Y109.48 during the US hours last night, in part due to news of Japan’s GPIF planning to re-allocate investments more toward domestic stocks instead of bonds. These developments have been widely reported in recent weeks and market players have been waiting for final confirmation on this, possibly today. In early dealings this morning, dollar-yen climbed early on follow-up action from the NY close but gains were capped at Y109.40. The release of Japan’s CPI data, at the same time as household spending and jobs data, didn’t trigger a massive response initially with dollar-yen holding around Y109.30/35. The biggest move however came after the BOJ announced a surprise decision to expand its asset purchase program. Dollar-yen jumped through offers at Y109.50 and Y110.00, setting off stops above the latter mark. It paused for a bit and then extended the rally through the 2014 high of Y110.09, before jumping through further stops at Y110.20 for a highof Y110.31, its highest since August 2008. The pair was last at Y110.20 and still holding on to the lofty highs seen after the BOJ’s shock decision.
