Daily Management Review

Is Bank of Japan preparing to leave the QE?


06/08/2017


The yen strengthened, and Japanese bonds fell on rumors that the Bank of Japan could change its rhetoric and admit that it is discussing a strategy of curtailing monetary stimulus, reports Bloomberg.



pixabay
pixabay
The Japanese currency rose against the currencies of all G10 countries after sources reported that the officials of the Central Bank of Japan are reviewing their rhetoric, while trying, however, not to give the impression that the curtailment of incentives is on the agenda.

The yield on the country's 2-year bonds has increased by 2.5 basis points to minus 0.09%, reaching a maximum since February 2016.

"The news that the Bank of Japan can discuss the exit strategy of the QE program pushed the couple of dollar/yen lower", said Goh Kun, Asia research director at Australia & New Zealand Banking Group Ltd. In Singapore.

"Nevertheless, I do not think that the influence on the yen will last for long. Central banks should think about how to get out of the unconventional monetary and credit policy, but this does not mean that it will happen in the near future", the expert added.

The dollar fell 0.2% against the yen to 109.59, after the US currency strengthened by 0.2%.

The euro against the yen also fell 0.2% to the area of 123.36.

Among the major world events that affect the exchange rates on Thursday was a speech of ex-director of the FBI James Comey in the US Congress, the meeting of the European Central Bank and the elections in Britain.

The pound sterling was down 0.1% against the US dollar to 1.2953 before voting in the UK.

source: bloomberg.com






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