Media report of BoJ equivocation on policy normalization – Scotiabank

The Japanese Yen (JPY) is weak, down 0.2% against the US Dollar (USD) and underperforming all of the G10 currencies with all other major currency peers showing modest gains (vs. USD), Scotiabank’s Chief FX Strategist Shaun Osborne notes.

JPY underperforms on the day

“The JPY’s weakness is being attributed to media reports on deliberations at the BoJ and an apparent lack of a clear consensus on the topic of unconventional (balance sheet) normalization and the pace of tapering for next year.”

“The reporting contrasts with BoJ Gov. Ueda’s comments earlier this week in which he offered a more solidly hawkish outlook that included both rate hikes and tapering.”

“The BoJ’s next meeting is on June 17 and market participants are expecting no major policy changes while also still expecting policymakers to remain committed to medium-term policy tightening.”