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Bank of Japan preview: New macro forecasts will shed light on next policy move
The BoJ’s ultra-loose monetary policy continues to pile pressure on Japan's financial markets. The 10Y JGB yield is hovering around 0.85% while USD/JPY just broke the critical 150 level this morning. The BoJ has conducted an unscheduled bond operation and offered one trillion yen's worth of 5Y loans to commercial banks in order to bring yields down while FX authorities continue to warn FX market participants that they will intervene when necessary. The weakening yen is putting more pressure on inflation, which will eventually hurt consumption, and a sharp rise in rates will likely hurt business investment. ... (full story)