Bank of Japan

Bank of Japan Changes Policy Framework

September 21, 2016

The BOJ Board released several documents in conjunction with the unveiling of a new policy orientation that is packaged to appear like a more substantive change than it really is. The released papers include A summary of decisions made, listing of dissenting votes, and two attachments. The first of these presents the BOJ staff’s “comprehensive […] More

Disappointing Bank of Japan Response

July 29, 2016

Market participants were expecting a more forceful Bank of Japan stimulus than was done.  The Bank of Japan’s three-tier interest rate structure wasn’t changed.  The macro add-on rate is zero.  The Basic Balance rate is 0.10%. The BOJ policy rate is negative 0.10%.  The program to increase bond purchases at a rate of 80 trillion […] More

Yen, Aussie Dollar and Kiwi Strengthen

July 26, 2016

The dollar fell overnight by 1.0% against the yen, 0.8% relative to the kiwi and 0.7% vis-a-vis the Aussie dollar, but the U.S. currency is little changed against other major currencies. The Japanese Nikkei lost 1.4% on signs from Finance Minister Aso that less fiscal stimulus is planned than investors were assuming.  The Bank of […] More

Bank of Japan Elects to Do Nothing New after Mid-June Meeting

June 16, 2016

The central bank’s inaction elicited a very negative market reaction that sent Japan’s stock market down 3.1%, pinned the JGB yield at negative 0.21%, and lifted the yen to a multi-year high against the dollar of 103.55.  The released statement of the Policy Board after deliberations totaling 4 hours and 9 minutes over two days […] More

Another Bank of Japan Surprise

April 28, 2016

The BOJ Board did not change any policy settings at this week’s meeting, surprising analysts and investors who almost universally were anticipating the unveiling of new stimulus.  Ever since a Japanese discount rate hike on Christmas Day 1989, I’ve learned to expect anything from Japan’s central bank.  It is ingrained in the institutional culture there […] More

Bank of Japan

March 15, 2016

The nine policy board members talked for five hours forty four minutes of talks over two days and in the end decided not to change the quantitative monetary stimulus settings nor the -0.1% policy interest rate.  Quantitative stimulus was introduced in April 2013 and modified in October 2014.  A three-tiered rate structure was adopted after […] More

Fresh Gloom Rekindles Risk Aversion

March 15, 2016

The Bank of Japan did not augment policy stimulus but did downgrade exports and residential construction and also observed that expected inflation has slipped.  The yen advanced 0.7% against the dollar and euro overnight in response. West Texas Intermediate crude oil fell 2.0% overnight and has faded slightly more than 5% over the past two […] More

Bank of Japan Introduces Negative Interest Rate to its Deflation-Fighting Toolbox

January 29, 2016

The five hour seventeen minute Policy Board meeting over two days surprised and electrified world financial markets with a statement that by a 5-4 vote added a negative interest-rate dimension to its nearly three-year-long experiment with quantitative and qualitative monetary easing.  Reserves held by the BOJ for financial institutions will from mid-February be earmarked for […] More

Japanese Central Bank Drops a Bombshell of a Surprise

January 29, 2016

The Bank of Japan adopted a negative interest rate after repeated officials comments from central bank officials earlier that they weren’t contemplating such. In response, Japanese share prices advanced 2.8% and the yen has fallen 2.2% against the dollar and 0.9% relative to the euro.  The 10-year Japanese JGB yield declined 12 basis point to […] More

Bank of Japan

December 18, 2015

After a Board meeting of five hours 36 minutes over two days that wasn’t expected to producer any policy changes, a statement was released that pushed out the targeted average maturity of the bank’s JGB portfolio to 7-12 years from 7-10, launched a second EFT purchase program amounting to slightly less than $2.5 billion per […] More