BOJ: Unchanged policy, more optimism about the economic outlook - SocGen

The main billed overnight event, the BOJ meeting, delivered unchanged policy, more optimism about the economic outlook, and a reversal of much of yesterday's yen rally notes Kit Juckes, Research Analyst at Societe Generale.

Key Quotes

“January's move to negative rates failed because the market wasn't long or bullish of the yen, investors couldn't be crowded out of domestic assets into foreign ones because they had already bought boatloads, and the yen was already very cheap.”

“September's move came when the market was long yen, which had rallied 20% by then, and global bond yields had turned higher. Brilliance or luck? It doesn't matter much, the question now is how cheap the yen can get (another 5%?) and how long risk sentiment can hold up.”