Speaks to Sankei Newspaper

He adds:

  • Pushing down 15 year JGB yyields below 0.2% would have much bigger stimulus affect them pushing down short-term rates
  • must avoid situation where BOJ forced to continue current easing for long time, thereby hurting financial system
  • no need to think about exit strategy now,, BOJ mmust focus on ways to hit 2% inflation target

There is little reaction to the comments. The USDJPY trades in around a 12 pip trading range but is back above the 50% retracement at 111.02 of the move up from the September low.

Yesterday the price dipped below that level and traded at the lowest level since September 15th but could not sustain the downward momentum. Buyers are trying to potentially turn the trend around.

However, one has to be aware that last week, the price fell and stayed below both the 100 and 200 day MAs (blue and green lines in the chart above). Those MAs do give the pair more of a bearish bias from that perspective. If the trend is to potentially turn around, not only does the 50% level have to hold but there needs to be a move back above those levels at 111.58-68 currently. I would expect that any rally would run into sellers leaning against the levels - at least on the first test.