Japanese Yen, JPY Talking Points:
- Last night brought a widely-watched Bank of Japan rate decision. The BoJ made no significant changes to their prior stances despite building anticipation for the bank to begin moving towards ‘less dovish’ policy.
- Instead, the BoJ continued to say that they will ‘closely watch’ the impact of sharp FX moves. To read more, check out Richard Snow’s earlier article entitled, Yen Plummets on BoJ Dovish Stance, Carry Trades Thrive[1].
- The analysis contained in article relies on price action[2] and chart formations[3]. To learn more about price action or chart patterns, check out our DailyFX Education[4] section.
Last night’s Bank of Japan rate meeting did not disappoint in terms of volatility, with the Japanese Yen[5] taking another leap-lower after the BoJ[6] avoided modifying their message that they will ‘closely watch’ the impact of sharp FX moves.
Ahead of the meeting, there was some building expectation that the BoJ may begin to shift away from their uber-loose policy outlay. Given the message from all of the other Central Banks that we heard this week, it seemed logical that the BoJ would similarly take on a bit of caution regarding inflation. Japan did just print its highest inflation read since 2008, with a 2.5% print. On the heels of that data release, Kuroda reiterated his message, saying that the BoJ was waiting for ‘stable’ inflation before modifying their policy and this gave the Yen another strong move-lower[7].
But, shortly after his comments he had to walk back some of those remarks. Kuroda issued an apology last week for downplaying the impact of inflation on the Japanese public and that, when combined with
