About BoJ Game Plan


Before Bank of Japan’s monetary policy decision on Friday, we wondered if they wouldn’t disappoint markets. Well, the truthful answer to that was always “no”.

Kuroda and the BoJ’s decision to do just the minimum in terms of stimulus, and nothing at all concerning already negative interest rates, simply wasn’t enough for an expectant currency market at a key technical junction.

USD/JPY daily

USD/JPY daily

The thin, nervous market was a preview of things to come as disappointment flooded the market and USD/JPY traded sharply lower cleanly off daily resistance.

The BoJ increased their ETF buying from ‎¥3.3 trillion to just ‎¥6 trillion, but when weeks leading into the decision were surrounded by talk of literally dropping money into the bank accounts of households (helicopter money), a ‎¥3 trillion Yen increase to markets, means they may as well have just sat on their hands.

USD/JPY 15 minute

USD/JPY 15 minute

As you can see on the intra-day chart, the market sold off hard from resistance, recovered somewhat throughout the London session, but was subsequently sold off once again following the weaker than expected US GDP data during the US session.

“USD Advance GDP q/q: 1.2% v 2.6% expected”

USDX daily

USDX daily

Once again, technical selling which was looking for any fundamental excuse to pull the rug out from under the market is exactly what we got.

Follow the @VantageFX Twitter account into this week as we continue to analyse the markets and identify trading opportunities in real time!

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This is a guest post originally appeared on Vantage FX. Reposted with permission.

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