The Bank of Japan concludes a two-day policy meeting on Tuesday amid intense speculation that it may adjust its massive monetary stimulus program. Economists who study the BOJ closely say such talk is premature.
Investors should brace for volatility in markets whatever the outcome. The central bank has been forced to conduct fixed-rate operations three times this month to curb rising yields on benchmark 10-year Japanese government bonds, the yen is primed to strengthen on any signs of tighter policy and some traders have placed bets on the possibility of changes to the BOJ’s stock purchases.
Governor Haruhiko Kuroda has stared down markets before, including in January when suggestions of normalizing policy emerged. All 44 economists surveyed by Bloomberg expect him to hold firm again on Tuesday given the weakness in inflation. If he does, the gulf will widen between the BOJ and its peers the U.S. Federal Reserve and the European Central Bank, which are winding back crisis-era settings.
via Bloomberg
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Alfonso Esparza