Commerzbank’s Head of FX and Commodity Research discusses the impact of the Bank of Japan’s (BoJ) bond purchases on the Japanese Yen.
“Not only did I see the Bank of Japan’s (BoJ) decision to allow higher JGB yields as the beginning of the end of ultra-expansionary monetary policy.”
“That seemed to be the widespread consensus. Meanwhile, the market did not appear to be certain whether that was right. Because the BoJ’s rationale was based only on market-technical considerations.
The USD-JPY pair briefly traded with a 134 handle.” “However, the fact that Japanese central bankers will have to defend the new upper limit for JGB yields with considerably greater zeal led in a reversal.
The USD/JPY pair is once again trading at around 131.00 (as I write this), which is roughly where the currency pair was trading after the BoJ decision.”
