Bank of Japan made no changes to the Yield curve control policy. It kept the band at +/- 0.50% and amended the rules for a fund supply market operation. Under the amended rules, BoJ can offer funds upto 10 years against collateral to financial institutions for both fixed and variable rate loans. Post the announcement, JGBs yields quickly fell to lows of 0.36%. I anticipated JPY to depreciate after a pull back on the sharp fall in yields but nah nah nah.. JPY completely reversed course. The price development only goes to show that the market anticipates YCC to likely end in march which is the last policy announcement by Governor Kuroda before the end of his term. The inflation data released today further emboldens the expectation. Japan's core consumer prices in December rose 4.0% from a year earlier, double the central bank's 2% target, hitting a fresh 41-year high. Dates ( according to Reuters) 10th Feb - Present nomineed to Parliament 16-17th Feb - hea...
The specific focus of the Blog is on Global and Domestic interest rates and currencies market. I look at fundamentals to define my bias and corroborate that with a study of price action to put on high conviction trades. The views and opinions are those of author and author alone. ~ Author: Vaishali Bagchi