The ultra-loose monetary policy | 12 December 2022

12 December 2022, USD/JPY

USDJPY trading plan:

Japan's economy is not yet in a phase where the central bank can end yield curve control (YCC), its board member Hajime Takata was quoted as saying by the Nikkei daily. Under YCC, the Bank of Japan sets a -0.1% target for short-term interest rates and caps the 10-year bond yield around 0% to achieve its 2% inflation target in a sustainable manner. Markets are simmering with speculation the BOJ could remove the 10-year yield cap to address the mounting cost of prolonged easing, such as the distortions its huge bond buying is causing in the shape of the yield curve.

Investment idea: buy 136.57 and take profit 137.33.

David Johnson
Analyst of «FreshForex» company
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