Bank of Japan pivot bombshell - widening 10yr JGB band to 0.5% (from 0.25). Yen up

Yen has surged and Nikkei (Japan shares) trashed.

The initial headlines were that the BOJ had left its policy unchanged, which they have.

• to maintain a -0.1% target for short-term rates
• and a 0% cap for the 10-year bond yield Yield A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as Read this Term (around 0%)

BUT they widened that band in which they allow the 10 yr JGB to move from 0.25% to 0.5%. This, in effect, is a long-awaited 'pivot' from the BOJ. A mini pivot for sure, but given nothing was expected until April, its significant.

More significant items from the statement:

• to increase bond purchases to JPY 9tln/month in Q1
• will review operation of Yield Curve Control (YCC)
• to conduct additional JGB purchases on December 22

In widening the band for the JGB target, the BOJ says that “the functioning of bond markets has deteriorated... If these market conditions persist, this could have a negative impact on financial conditions."

JPY JPY The Japanese yen (JPY) is the official currency of Japan and at the time of writing is the third most-traded currency in the world behind only the US dollar and euro.The JPY is used extensively as a reserve currency and is relied upon by forex traders as a safe haven currency.Originally implemented in 1871, the JPY has had a long history and has survived multiple world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the full oversight of the JPY by The Japanese yen (JPY) is the official currency of Japan and at the time of writing is the third most-traded currency in the world behind only the US dollar and euro.The JPY is used extensively as a reserve currency and is relied upon by forex traders as a safe haven currency.Originally implemented in 1871, the JPY has had a long history and has survived multiple world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the full oversight of the JPY by Read this Term has surged, USD/JPY plunged to circa 134.30 while the Nikkei dropped (futures trade is active, down over 4%, physical is closed for the lunch break ... traders getting indigestion as we speak)