The only thing keeping down the yen is Fed hopes and fears
That was no bazooka.
The Bank of Japan decision was built up for three months and in the end, all they did was make it a bit easier for banks to make money.
Supposedly, Kuroda "strengthened monetary policy" by disavowing (but also curiously Keeping) the 80T yen annual QE target. In theory, there is now no limit but in practice, he told reporters in the press conference buying could "increase or decrease."
The highlight was YCC, or Yield Curve Control, which is the rumored policy of trying to control the bond market (which should be easy enough, given they own half of it). But given that they're trying to push up the long end, it's far-from-guaranteed it will hurt the yen.
On inflation they promised an "inflation-overshooting commitment", which means expanding the monetary base until the CPI exceeds 2%. The problem with that, like so many BOJ efforts at forward guidance, is that the credibility-tank is empty.
So there was nothing special, nothing unexpected, no negative rates and the BOJ didn't uncover any new stash of ammunition to fear. They warned about cutting further negative or pulling the curve further down but it's hardly something to spook the yen bulls. Kuroda highlighted that foreign bond buying is illegal as well.
Yen outlook
There's nothing to hold down the yen except the clock. USD/JPY would be well-below 100 right now if not for the looming Fed decision.
Shortly after Yellen reveals the usual wait-and-see/data-dependent statement, the USD/JPY sellers will go to work.
The levels to watch are the minor uptrend since the Brexit and the July & Aug lows. If/when they give way, it's down to 95.00 where the intervention talk will take over.
