BOJ Keeps Rate, Yield Target On Hold, Upgrades Growth Forecasts: USDJPY Slides

Moments ago the BOJ concluded its two-day meeting, and unlike a year ago when Kuroda unveiled NIRP,  this time there were no surprises or fireworks. In a 7-2 decision (Sato and Kiuchi voting against), the BOJ kept its rate at -0.1% as expected. The Central bank also kept its 10Y yield target at around 0%.

However, in a modest hawkish revision of its forecast, the BOJ increased its fiscal 2016 GDP forecast to 1.4% vs 1.0% in October, increased fiscal 2017 GDP growth to 1.5% vs 1.3% prior, and increased the fiscal 2018 GDP forecast to 1.1% from 0.9% previously. The bank also expects 2017 core CPI to print at 1.5%, unchanged from the last forecast.

The BOJ will continue nationalizing its equity capital markets at a rate of JPY6 trillion in ETFs, and JPY90 billion in J-REITs per year.

Finally, the cental bank extended the duration of its lending-support program by one year.

Following a kneejerk reaction which sent the USDJPY as high as 113.70 after the announcement from 113.50 previously, the USDJPY has since slid to 113.30, the lows on the session.


And zoomed in... because unlike a year ago when the BOJ unveiled NIRP leading to a V-Fib in the USDJPY, this time the reaction was positively tame.

The full, if rather dull, BOJ statement is below: