The bank of japan surprised the market by raising the upper bound of its yield curve control policy. This measure caused the yen to rise by more than 3% against the dollar and the euro. ABN Amro economists forecast a further rally in the yen.
Key Statements:
“The Bank of Japan surprised everyone by changing its YCC (yield control curve) framework much sooner than expected. Although it is keeping its breakeven rate and 10-year yield target unchanged for now (in -0.1% and 0.0%, respectively), the Bank of Japan announced the widening of the trading band for 10-year bond yields and raised the upper limit of the band from 0.25% to about 0.50%.” .
“The dollar’s uptrend against the yen has also come to an end, with the breakout of the 200-day moving average in USD/JPY.”
“We expect more yen gains against the dollar, mainly because of the Fed rate cuts that we expect to start in late 2023.”
“Our year-end forecasts for USD/JPY currently stand at 132 for 2023 and 125 for 2024.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
