FOREX
The Japanese yen touched a four-month high versus the US dollar during early Tuesday trading. The surge came after the Bank of Japan surprised the markets, by announcing a review of its yield curve controls, while also relaxing the limits for its 10-year bond yields. While the announcements don’t, per se, represent an actual resetting of the central bank’s policies, they signal an intention to create an exit strategy from the ultra-accommodative approach that has characterized the BoJ’s stance over the last few years. The news took the markets by surprise, with few expecting such move, which comes only a few months before the end of Governor Kuroda’s 10-year mandate. Judging by the market reaction, with the yield on the 10-year JGB reaching 0.46%, which is well above the previous 0.25% cap, there may scope for further yen gains in the short-to-medium term.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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