Mixed and marginal messages from the bank of Japan
|Summary
In a widely anticipated announcement, the Bank of Japan (BoJ) announced the resultsof its policy strategy review at today's monetary policy announcement. In the event,the central bank made only modest tweaks to its policy framework, and we see noclear signals that a further policy adjustment is imminent.
The BoJ modestly widened the tolerance range for its 10-year Japanese governmentbond yield target to +/- 25 basis points. The BoJ also removed the previous floor forits purchases of exchange-traded funds, and established an interest rate scheme topromote lending that could make it easier for the central bank to lower its alreadynegative policy interest rate.
We view the changes to the policy framework as balanced, with valid arguments thattoday's changes could contribute to either more or less monetary easing. The yen ismodestly stronger versus the greenback, though we believe that has more to do witha slight decline in U.S. Treasury yields than the changes announced by Japan's centralbank.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.