BOJ was undertaking unconventional steps | 25 May 2021

USDJPY trading plan:

A dearth of conventional monetary tools is pushing the Bank of Japan closer to the realm of fiscal policy. Aside from keeping interest rates ultra-low, the BOJ buys huge sums of government bonds and risky assets like ETFs to revive growth and fire up inflation to its 2% target. As part of efforts to cushion the blow from COVID-19, the BOJ also created a scheme that pays interest to banks that boost government-guaranteed loans to cash-strapped small firms. BOJ Governor Haruhiko Kuroda has said the central bank was undertaking unconventional steps and keeping borrowing costs low solely for the purpose of hitting its 2% inflation target, not to support government finances. This is a negative signal for the Japanese yen.

Investment idea: buy 108.45 and take profit 108.85.