Courtesy of Mish.
The markets expected the Bank of Japan to unleash lower yields further into negative territory at its Friday policy meeting.
Instead the board voted to keep rates unchanged and to maintain existing monetary base targets. But the BoJ did vote to increase equity ETF purchases and increased US dollar swaps.
This set of moves led to some wild moves in the Nikkei, and a 1.6% increase in the Yen vs. the US dollar.
Yen Surges
Wild Ride in Nikkei
The initial reaction was hugely negative. That was followed by a rebound to break even, another plunge, then a rally back to the green, all in a short time span.
Saxo bank chief economist Steen Jakobsen pinged me the key takeaway was the doubling of its US dollar loan facility is an admission of a dollar funding crisis but otherwise the rest of the policy statement was weak.
