Sage Investment Club

Bank of Japan policy meeting is next week, on January 17 and 18.
Yomiuri (Japan media) reported today that in this meeting the Bank
will review the side effects of its monetary easing and may take
additional steps to correct distortions in the yield curve. You’ll
recall that at the meeting in December the Bank ‘tweaked’ its
yield curve control program to allow 10-year Japanese Government
Bonds to trade to a 0.5% yield from the cap at the time of 0.25%. Any
further ‘tweak’ along these lines would be another dilution of
ultra-easy policy. Let me be clear, the move in December was small,
that’s why it is described as a tweak, given the vast scale of BOJ
easing. Let me also be clear that even this small move from the BOJ
had an outsize impact due to Bank of Japan Governor Kuroda
continually denying any such change was even under consideration …
right up until the bombshell dropped.

news today prompted a dumping of USD/JPY, from highs on the session
above 132.40 to lows under 131.60.

across major FX rates ranges were confined in small ranges with a
touch of USD weakness. Traders are awaiting the US CPI report due
later Thursday. There are previews linked in the posts above.

equity markets mixed:

  • Japan’s
    Nikkei 225 flat

  • China’s
    Shanghai Composite -0.2%

  • Hong
    Kong’s Hang Seng -0.5%

  • South
    Korea’s KOSPI +0.3%

  • Australia’s
    S&P/ASX 200 +1.2%


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