JPY surrounded by enigmas – BBH

By FXStreet FXStreet (Córdoba) – Analysts from Brown Brother Harriman, analyzed recent USD/JPY moves and its possible implications.

Key Quotes:

“Last year was the fourth consecutive year that the yen fell against the dollar. However, what is obscured by this factoid is that over the past six months, the yen has been the strongest of the major currencies, rising almost 3.2% against the US dollar. While some may be tempted to attribute the yen’s strength to the dismal start of the year for equities, the fact of the matter is that the yen’s strength began before this week.“

“Recall that 48 hours after the Fed hiked rates last month, the BOJ announced some largely operational adjustments to its asset purchase program. The explicit goal was to sustain the asset purchases, and this included extended the duration of government bonds being bought. The BOJ announced that it would buy more equities (ETFs) as well. “

“Although in the past, extending maturities of bonds being purchased by a central bank was considered easing, this time is seen differently. It was seen as a sign of the BOJ reluctance to step up it efforts.”

“The dollar-yen and the S&P 500 were …read more

Source:: FX Street