{"id":169411,"date":"2020-04-27T08:00:51","date_gmt":"2020-04-27T12:00:51","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=169411"},"modified":"2020-04-27T07:35:07","modified_gmt":"2020-04-27T11:35:07","slug":"yen-underwhelmed-as-boj-jumps-on-whatever-it-takes-bandwagon","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/04\/yen-underwhelmed-as-boj-jumps-on-whatever-it-takes-bandwagon\/","title":{"rendered":"Yen underwhelmed as BOJ jumps on \u201cwhatever it takes\u201d bandwagon"},"content":{"rendered":"
April 27, 2020<\/div>
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By Han Tan, Market Analyst, ForexTime<\/a><\/strong><\/p>\n

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The Japanese Yen initially breached the 107.3 level against the US Dollar, only to pare\u00a0gains, after the Bank of Japan pledged unlimited buying of government bonds and agreed to raise its holdings of corporate debt to 20 trillion Yen. However, the BOJ has maintained its policy rate at minus 0.1 percent, while forecasting a GDP contraction between -5 to -3 percent for the year.<\/p>\n

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The relatively muted reaction in the Yen is perhaps because\u00a0the announcement is\u00a0seen as having little material impact on bond markets, with the BOJ\u2019s purchasing momentum lagging behind its previous target of 80 trillion Yen\u00a0prior to Monday’s pledge for “unlimited” purchases. This has fuelled criticisms that the BOJ has not been keeping up in ensuring enough policy support to curtail the economic damage left by the coronavirus outbreak. The central bank is also mindful of its limited policy space, while not lending too much upward pressure on the Japanese Yen, as export activities could be curtailed by a stronger JPY.<\/p>\n

Markets could have another chance to react during BOJ Governor Haruhiko Kuroda\u2019s press conference later today.<\/p>\n

Central banks in race to unleash support measures<\/strong><\/p>\n

Stil, the BOJ\u2019s Monday announcement was in line with other major central banks, such as the Federal Reserve and the European Central Bank, who have used unprecendented monetary policy measures to support their respective economies in the wake of Covid-19. The BOJ likely moved ahead of the ECB and Fed\u2019s scheduled policy decisions later this week, in order to not be seen as lagging behind its major peers when rolling out more supportive measures, in which case could have resulted in a massive Yen surge.<\/p>\n

The BOJ announcement also failed to excite EURJPY, which is holding steady around the 116.3 mark. The European Central Bank, which has a policy decision due Thursday, is widely expected to ramp up its emergency bond-buying programme over the coming months. This year, the ECB could end up buying over 1.5 trillion Euros worth of assets to support the EU economy that is set to see the sharpest recession in its history.<\/p>\n

Despite EURJPY having clawed its way back up in recent sessions, it should not detract significantly from the overall downward bias for the Euro, amid forecasts of a\u00a0EU economyic contraction of up to 15 percent this year, versus the overall risk aversion that is set to be supportive for safe haven assets, such as the Japanese Yen.<\/p>\n

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Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Han Tan, Market Analyst, ForexTime The Japanese Yen initially breached the 107.3 level against the US Dollar, only to pare\u00a0gains, after the Bank of Japan pledged unlimited buying of government bonds and agreed to raise its holdings of corporate debt to 20 trillion Yen. However, the BOJ has maintained its policy rate at minus […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-169411","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=169411"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169411\/revisions"}],"predecessor-version":[{"id":169430,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169411\/revisions\/169430"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=169411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=169411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=169411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}