The Bank of Japan kept its interest rates unchanged at -0.1% at today’s meeting, as expected. The BoJ continued to defend low rates by buying bonds, but its orientation is extremely dovish and dovish.
The USD/JPY has reached after the decision new maximums of twenty years in 130.27 after skyrocketing about 165 pips. At time of writing, already at the European open, the pair is trading above 130.15, gaining 1.33% daily.
While the BoJ was expected to maintain its existing ultra-loose policy setup, the yen tumbled as the central bank announced its plan to carry out unlimited fixed-rate bond purchase operations every business day “until it is very likely that no bids will be submitted.”
The entity maintains its 10-year JGB yield target of around 0%. In addition, he notes that he will relax policy without hesitation as needed considering the impact of the pandemic as he strives to maintain market stability and support corporate funding.
Source: Fx Street
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