The Bank of Japan delivered its Statement on Monetary Policy and made policy changes as rumored, changing the long term yield target, flexible guidance and is maintaing low rates for ‘a very long period of time’ with the aim of a sustainable stimulus..
The Bank of Japan frustrated with stubborn low inflation is actively looking to revamp policy before it’s July meeting Reuters is reporting sources saying. Changes to its interest-rate targets and stock-buying techniques are on the table with the aim of a sustainable stimulus..
Haruhiko Kuroda was reappointed for another five years as Governor of the Bank of Japan Friday in Japan’s National Diet lower house. Koroda is a sprightly 73 and been in the job since 2013. The move was expected and contunes more of the same for Japan.
The Bank of Japan announced it is cutting back the purchase of Japanese Government Bonds (JGB). The BOJ had announced it is targeting the yield curve so should not be unexpected.
Bank of Japan board member Hitoshi Suzuki signaled in interviews that the BOJ may raise interest rates before inflation hits its 2% target. He also said the BOJ could slow or change the way it buys exchange-traded funds (ETF) purchases in the future.
The Japanese Yen continues to weaken after completing the 3 wave move under $USDJPY 108 last week, yen weakness has accelerated as the British Pound gets back to Brexit night levels. GBP demand has taken $GBPJPY up to 151.54 after triggering large stops.
Japan’s economy is benefiting from higher exports. Their trade surplus for July came in higher ¥ 418.8 billion then the expected ¥ 327.1 billion. June saw ¥ 439.8 billion. Exports to the U.S. +11.5% y/y, to China +17.6% y/y
The latest move from the yen comes as no surprise as we wrote about yen shorts building with $JPY short positions are at their highest since 2014. The herd has been caught again, part of it is the U.S. traders obsession with the dollar index rather than the currency itself.
Yen shorts continue to build despite the Japanese currency gaining, CFTC data show $JPY short positions are at their highest since 2014. Is the herd wrong?