We don’t have a trade call for the London session. The main event during the Asian session was the announcement from the Bank of Japan that they will implement negative interest rates. The Bank will apply -0.10% interest for excess reserves that financial institutions park at the BOJ. This provides financial institutions with an incentive to hold and lend money, which stimulates the economy. The expansion of the monetary base remains unchanged at ¥80 trillion per annum. The Bank also pushed back their target for CPI reaching 2% to around the end 2017 and said they will cut rates further if necessary. Yen pairs rallied immediately upon release with USDJPY rising 285 pips and GBPJPY 400. Yen pairs then retraced almost all of the move before edging higher.
