The Bank of Japan is next meeting on January 22 and 23.
The deadly New Year earthquake has finally extinguished hope (there’s that four-letter word again) for an end to BOJ negative rates at this meeting. I find it difficult to believe that anyone even remotely in touch with relevant BOJ/yen news ever entertained thoughts of such a move in January, but I do welcome ill-informed speculation in markets. I love it when the competition is clueless.
Anyway.
Mizuho Bank:
- “Although there must be quite a few foreign investors who have been anticipating the end of negative rates in January, under these circumstances, the BOJ will almost certainly not move this month,”
Daiwa Securities:
- “negative rates … January move seems even more impossible”
The ending of the prospect of a January move away from negative rates from the BOJ has been cited as a reason for the yen fall, with USD/JPY back towards 144.50. Don’t forget to add in the equally insane thoughts of a January rate cut from the Federal Open Market Committee (FOMC). The prospect of that has dropped to zero too, thankfully.
The USD/JPY carry is still circa 5.5% and will be for a few months to come.
USD/JPY update.