The Bank of Japan monetary policy meeting was the Asian time zone focus today. The policy board left current settings untouched:

  • Short term interest rate target unchanged at -0.1%
  • 10 year JGB yield target unchanged at around 0%
  • +/-50bp band for 10-year JGB yield target left unchanged
  • The BOJ says the vote on YCC was unanimous

There had been some speculation that Bank of Japan Governor Kuroda would expand the +/- 50bp band. It was not the consensus expectation, nor even widely held, but there was a wariness that after the surprise widening of the band at the BOJ December 2022 meeting Kuroda could surprise again. He did not.

USD/JPY was marked higher on the news and, as I update has given a little back to be circa 136.50. Regional equity markets had been under selling pressure, their lead taken from the substantial losses on Wall Street on Thursday and only got a transitory reprieve (pun intended, its Friday after all) on the BOJ.

Elsewhere currencies have been mixed. USD/CAD is higher but EUR is a little higher against the US dollar. CHF too is an out performer against the USD.

Asian equity markets:

  • Japan’s Nikkei 225 -0.9%

  • China’s Shanghai Composite -1.1%

  • Hong Kong’s Hang Seng -2.4%

  • South Korea’s KOSPI -1.2%

  • Australia’s S&P/ASX 200 -2.1%

boj wrap 10 March 2023 yen