BOJ May Have Disappointed Many

After a month of equity and government bond market volatility, the Bank of Japan’s (BOJ) monetary policy announcement on Tuesday came as a letdown to investors expecting the central bank to adopt a more pro-active policy stance.

The U.S. dollar-yen fell to as low as 97.78 and the Nikkei 225 slipped as much as 1.5 percent, reflecting disappointment among market participants who were looking for the BOJ to announce measures aimed at calming swings in Japanese government bond (JGB) yields that hit a one-year high around 1 percent in late-May.

“The BOJ should have done something to calm down volatility and the level of the JGB yields. We had a big collapse in the equity market partly because of high volatility in the JGB market. It’s important the BOJ and government show concern over the correction,” Kenji Abe, equity strategist at Citigroup Global Markets Japan, told CNBC.


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