USD/JPY headed to (but didn’t quite get all the way) to 133.50 during the session here ahead of the Bank of Japan statement. The upmove came after the huge shunt lower following the Swiss National Bank shock 50bp rate hike on Thursday caused the CHF to soar. The SNB decision piqued thoughts that perhaps the BOJ would dial back its accommodative policy Friday. I posted previews (see bullets above) but in brief, expectations of any tightening of policy today were basically non-existent or at least very low indeed.

The SNB have provided a valuable lesson in never ruling anything out. I would note though that the SNB had wavered on loose policy in the weeks ahead of the decision (having said this, the vast majority of analysts were expecting an hold decision). The BOJ gave no such clues ahead of today’s meeting. And, the result was an ‘on hold’ decision from the BOJ. There is no change at all to their policy measures. The April ‘buy JGBs ever day’ policy was restated. This is not a Bank cutting back on loose policy any time soon.

As I said above, USD/JPY surged towards 133.50 prior to the statement from the Bank on policy. As soon as the no change decision was announced though USD/JPY rocketed higher. Yen crosses also, of course. USD/JPY traded to just over 134.50 and has swung, in a volatile wide range, since. Given the renewed, and widening, policy divergence between the Bank of Japan and other DM central banks (ECB excepted, get a move on you lot!) I’m looking for USD/JPY to retest 135 in the days ahead. This time I do not expect 135 to hold.

News flow elsewher was very light and non-impactful. Ditto for data.

Otherwise across the majors the USD has been mixed. We’ve had a bit of a retracement for USD/CHF, while EUR, AUD, NZD, GBP have all slipped a little against the dollar.

BTC/USD revisited towards $21K. Oil is little changed net for the day.

USD/JPY roller coaster since the BOJ announcement (arrow), short term bars as a bit of an idea of the volatility ICYMI:

usdyen wrap boj 17 June 2022