BOJ expectations

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  • The BOJ meeting will end sometime early-to-mid-afternoon Tokyo time.
  • The target interest rate will remain at 0.0% to 0.1%
  • Markets have already priced in around JPY5 trillion in fresh asset buying
  • Some expect that the amount could be as high as JPY10 trillion
  • BOJ may also buy longer term JGBs

There have been some mixed messages from the BOJ in recent weeks and ‘market neutral’ seems to be JPY5 trillion over┬ásome longer timeframes. JPY 5 trillion over shorter timeframes will probably see the JPY strengthen in short-term whereas JPY10 trillion and longer timeframes will see the Yen weaken.

4 Comments

  1. Yikes, I hopped on twitter to see what the outcome of the BOJ meeting was and I saw this. I thought, here in the St. Louis area, that it was Friday evening! Maybe I should abstain from trading for awhile until I become a bit more clear-minded :)

  2. Hi Sean,
    Can you explain and sorry for ignorance.
    If BOJ do 5 trill. what s yr expected analysis / target level?
    Also if they do 10 trill. ?

    I assume the market reaction if announced will be instant and not delayed ?
    Are we looking at 200 , 500 or more move here?

    Thanks for your expert info,

    Regards,

    David.

  3. I can only guess David but I’d say 5trln and shorter timeframes would see USD/JPY fall to 80.50, maybe little bit lower on initial disappointment, but should then rebound as its expansionary anyway. 10trln and longer timeframes should see 8200 tested pretty quickly and then usual slow march higher over next week?

  4. Thanks Sean,
    Sounds sensible

    Have a great day mate.

    David.

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