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Saturday, 28 January 2023
Yen Takes A Breather As Bank Of Japan Sways Into Bond Market

Yen Takes A Breather As Bank Of Japan Sways Into Bond Market

2022-10-31

 

The Bank of Japan is hoping to take some of the pressure off of the Japanese government as it continues to struggle with an unprecedented level of public debt. The BOJ’s latest easing measures, announced on December 19, are designed to lower long-term interest rates and support the sluggish Japanese economy. But while the measures are intended to have a lasting impact, they will not be enough to prevent the central bank from returning to the bond market later this year. As a result, Yen traders have high expectations for the bank’s next move.

The BOJ’s decision to increase its inflation target by 50 basis points to 2% has provided the central bank with the ammunition it needs to continue its aggressive easing program. The central bank announced several new programs on December 19th, including a 2 trillion yen ($17.6 billion) program to provide sub-zero rate loans to regional banks, and a new program to buy long-term government bonds. The latter program is a sign that the BOJ is preparing to return to the bond market. The central bank will likely make another announcement as early as its January meeting.

What the Bank of Japan Did on December 19

The Bank of Japan kept its key interest rate at 0.1% and announced a new easing program designed to lower long-term rates and promote spending in Japan. The BOJ said that it would buy stocks and bonds with maturities longer than one year, and additional bond purchases totaling up to a whopping YEN 2.8 trillion ($23.2 billion). In total, the central bank now owns more than YEN 24 trillion ($219.5 billion) worth of Japanese government bonds and securities.

What to Expect from the Bank of Japan in 2019

The BOJ’s decision to buy more government bonds and securities at the end of 2018 was likely a sign that the central bank will make another significant move later this year. Traders are now busy trying to guess when the bank will make its next move, and what that will be. Some analysts have even gone so far as to suggest that the BOJ could begin scaling back its easing program as soon as this month. Given the central bank’s track record of patience, we would not be surprised to see the bank take its time before making another move.

Why Yen Traders Are Optimistic About the Japanese Yen in 2019

The Japanese government is struggling to deal with an unprecedented level of public debt, but the BOJ’s latest easing measures were designed to have a lasting impact. That said, the measures will not be enough to prevent the central bank from returning to the bond market later this year. As a result, traders have high expectations for the bank’s next move.

How to Trade Yen in 2019

 
 

The yen has been getting crushed recently, primarily due to fears that Japan’s neighbors could launch a new round of quantitative easing. The BOJ’s decision to ease further and buy more government bonds and securities sent the yen tumbling to a two-year low against the dollar. Traders are now pinning their hopes on a speedy recovery in the Japanese economy and a return to more normal terms in the country’s public finances.

Bottom Line

The Bank of Japan will likely make another announcement as early as its January meeting. Traders are now busy trying to guess when the bank will make its next move, and what that will be. Some analysts have even gone so far as to suggest that the BOJ could begin scaling back its easing program as soon as this month. Given the central bank’s track record of patience, we would not be surprised to see the bank take its time before making another move.

The Japanese yen has been getting crushed recently, primarily due to fears that Japan’s neighbors could launch a new round of quantitative easing. The BOJ’s decision to ease further and buy more government bonds and securities sent the yen tumbling to a two-year low against the dollar. Traders are now pinning their hopes on a speedy recovery in the Japanese economy and a return to more normal terms in the country’s public finances. The yen is likely to remain under pressure in 2019.

If you are interested in trading the Japanese yen, you should consider setting up a cryptocurrency trading account with a brokerage like this one. You can then pair your brokerage account with a digital currency exchange like Coinbase to buy, sell, and trade yen-denominated digital assets.

You can also keep track of the yen’s current value in the coming months by checking out our calendar of events for the latest cultural and sports events taking place in Japan.

For the latest cryptocurrency news, check out our cryptocurrency events calendar and look out for the latest Bitcoin and altcoin news on our cryptocurrency news page. If you have any questions about Japanese yen trading, feel free to reach out to our experts via email at email protected or via live chat anytime during business hours.

How to Trade Yen in 2019

The Japanese yen has been getting crushed recently, primarily due to fears that Japan’s neighbors could launch a new round of quantitative easing. The BOJ’s decision to ease further and buy more government bonds and securities sent the yen tumbling to a two-year low against the dollar. Traders are now pinning their hopes on a speedy recovery in the Japanese economy and a return to more normal terms in the country’s public finances. The yen is likely to remain under pressure in 2019. If you are interested in trading the Japanese yen, you should consider setting up a cryptocurrency trading account with a brokerage like this one. You can then pair your brokerage account with a digital currency exchange like Coinbase to buy, sell, and trade yen-denominated digital assets. You can also keep track of the yen’s current value in the coming months by checking out our calendar of events for the latest cultural and sports events taking place in Japan. For the latest cryptocurrency news, check out our cryptocurrency events calendar and look out for the latest Bitcoin and altcoin news on our cryptocurrency news page. If you have any questions about Japanese yen trading, feel free to reach out to our experts via email at email protected or via live chat anytime during business hours.

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