Yen selloff fades before high-stakes BOJ decision
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The yen's recent violent selloff came to an abrupt halt Tuesday as investors waited to see if the Bank of Japan would deliver its most aggressive effort yet to beat years of economic stagnation, or disappoint as so often in the past.
The dollar bought 89.63 yen, having peaked at a 2-1/2 year high of 90.25 on Monday. Since Dec. 4, the dollar has rallied an eye-watering 10 percent on the yen.
The BOJ, which is starting its policy-setting meeting earlier than usual, is under intense political pressure to overcome deflation and lift the world's third biggest economy out of recession.
But the Japanese central bank has a track record of disappointing markets and traders said if it simply announces a new inflation target of 2 percent and raises the ceiling of its asset-buying programme by 10 trillion yen, the yen could bounce back strongly.
"Given the transparency surrounding this meeting...there is a strong possibility that this is a typical 'buy the rumour, sell the news' event," said Christopher Vecchio, currency analyst at DailyFX.
read more ...