Bank of Japan afraid to raise interest rates | 31 Oktober 2023

USDJPY trading plan:

The Bank of Japan further loosened its grip on long-term interest rates by tweaking its bond yield control policy again, taking another small step towards dismantling the controversial monetary stimulus of the past decade. The bank's nine-member board also revised up its price forecasts to project inflation well exceeding its 2% target this year and next, underscoring a growing conviction that conditions for phasing out ultra-loose monetary policy are falling into place. As widely expected, the BOJ maintained its -0.1% target for short-term interest rates and that for the 10-year government bond yield around 0% set under its yield curve control (YCC). But the BOJ re-defined 1.0% as a loose "upper bound" rather than a rigid cap and removed a pledge to defend the level with offers to buy unlimited amount of bonds.

Investment idea: buy 150.09 and take profit 150.54.