28 Apr 2016
USD/JPY: fell back for re-test of 107.60 - BTMU
Analysts at Bank of Tokyo Mitsubishi explained that the yen has strengthened sharply following the BoJ’s “surprise” decision to leave monetary policy unchanged.
Key Quotes:
"Our analysts in Tokyo had correctly cautioned that the BoJ were unlikely to ease policy further so the decision was not entirely a surprise.
However, it is clear that the BoJ has chosen to disappoint market expectations for easing which had stepped up late last week following the release on Friday of a Bloomberg report suggesting that the BoJ were considering lowering the interest rate on reserves and introducing a negative rate on the BOJ’s Support for Lending program."
"The report proved misleading as Governor Kuroda stated in the press conference that the BoJ did not even discuss introducing a negative rate on the BOJ’s Support for Lending program.
As a result, it is not surprising that USD/JPY has quickly reversed the temporary spike higher to the 112.00-level and is now falling back towards a likely retest of the recent lows at around 107.60."
Key Quotes:
"Our analysts in Tokyo had correctly cautioned that the BoJ were unlikely to ease policy further so the decision was not entirely a surprise.
However, it is clear that the BoJ has chosen to disappoint market expectations for easing which had stepped up late last week following the release on Friday of a Bloomberg report suggesting that the BoJ were considering lowering the interest rate on reserves and introducing a negative rate on the BOJ’s Support for Lending program."
"The report proved misleading as Governor Kuroda stated in the press conference that the BoJ did not even discuss introducing a negative rate on the BOJ’s Support for Lending program.
As a result, it is not surprising that USD/JPY has quickly reversed the temporary spike higher to the 112.00-level and is now falling back towards a likely retest of the recent lows at around 107.60."