Last weekend came remarks from BOJ Governor Ueda about a “quiet exit” from the current loose monetary policy.
Major banks, including Credit Agricole, had warned in recent weeks of possible intervention (including verbal) by the BoJ.
The reaction in the USDJPY and yen crosses came right at the market open on Sunday evening. The USD/JPY currency pair opened at around 147.00 (almost 100 pips lower than Friday night’s close) and continued to fall on Monday to around 145.90. Currently, the USDJPY rate is at around 146.50.
The upside potential of USD/JPY is likely to be limited for the time being. Ueda’s comments are unclear, however, and past experience suggests caution. Ueda’s tenure has so far been characterized by hesitant action.
In summary, the BOJ has indicated that it will adjust its monetary policy for greater confidence in the yen.
The open question remain:
When exactly will What be done to guide the currency back onto stable feet?
