BOJ April Minutes: Few members said should buy bonds aggressively to keep yield curve stably low

Dhwani Mehta FXStreet

The Bank of Japan (BOJ) published the minutes of its April monetary policy meeting, with the key highlights found below.

Agreed strong uncertainty over timing of when pandemic will be contained, impact of virus on overseas, domestic economies.

A few members said prolonged economic weakness could lead to rising credit costs for banks, hurt financial intermediation.

A few members said BOJ should buy bonds aggressively to keep yield curve stably low.

One member said BOJ must scrutinise effectiveness of current policy to avoid return to deflation.

One member said further fall in interest rates could lead them to reach levels deemed 'reversal rate' where negative effect of low rates outweighs positives.

Cabinet office representative said today's BOJ move will enhance effect of govt, BOJ policy mix.

At its shortened one-day virtual monetary policy meeting held on April 27, the BOJ eased policy further, said it will increase the purchases of a corporate bond, and commercial paper. The central bank also pledged to buy an unlimited amount of JGBs.

Meanwhile, it expanded the coronavirus pandemic lending program to around JPY110tln from JPY75 trillion, at its latest June monetary policy meeting. The Japanese central bank left the key monetary policy settings unchanged.

Market reaction

USD/JPY falls back below 107.00 on the above Minutes release, despite the positive open on the Japanese markets.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.