Post BOJ thoughts.

As expected, the BOJ held rates. The JPY initially weakened, as there was no mention of a reduction in bond purchase. And my initial thought, pre press conference, was that a JPY short would be a very viable trade today.

But during the press conference, it was confirmed a reduction in bond purchases would begin next month. Which has taken the wind out of the sails of yen weakness. (A reduction in bond purchases= higher JGB yield, which in theory= stronger JPY).

Although I'm still confident 'short yen, interest rate differential' trades will be prevalent over the coming weeks and months. For today, especially because it's Friday, I'm content to sit on the sidelines and let the dust settle.

Feel free to email any questions: johnelfedforexblog@gmail.com