Is this something that changes your perspective/outlook/trading strategy? It seems traders are treating this like it’s a huge deal and that all countries will be affected by this. How does this translate to forex trading?
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I have more focus on USDJPY recently, 
since if Japan has any action on their monetary policy it will affect to USD then another currencies and gold. If inflation of November (will be released tomorrow) keeps high, I think we can see more action from BOJ since they want to control inflation and expect it would be around 2% next year.
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Are you currently trading it? Or recently did? If so, how are these trades doing? 
I have 2 trades with USDJPY currently, both are in profit. Actually I entered the trade quite early so yesterday I was in lost because USDJPY went to downtrend but later it is on the way to reversal. After this correction, if there is any downtrend appears, I think USDJPY might have another low level in this month.
I read the article out of interest due to it being quite big news. Unfortunately my knowledge of the bond market and how bonds work is very very basic but this is what I can gather (please correct me if I’m wrong):
- This is somewhat a new strategy the BoJ are using as monetary policy
- By allowing the yield to move double the points it was previously capped at this will instantly attract more buyers thereby applying upwards pressure on the price of the bond in the secondary market.
- The large purchasing of bonds by the bank whilst increasing the yield band will in a way, negate the usual behaviour of central banks. Buy bonds → More money in the money market → lower interest rates
- By doing this, the BoJ has made the Japanese bond market more attractive so any leakages in the economy may turn into injections. Additionally, this move does not show any reason for businesses to lower their investment and consumers their spending
- This move was made with maintaining the YEN’s value as their primary objective so the above point (injection into the economy) would allow for that to happen.
Overall, they aim to make a more attractive economy that has the outlook of growth whilst not giving any reason to make everyone believe there will be interest rate hikes and/or higher inflation.
Like I said, I am very much a novice in this field but basic laws of economics can always paint a picture when you spend some time reading around and seeing what X does to effect Y and so on.
Are you still in it? If so, that’s looking good for you esp if you exited last Thurs!
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I like how you broke it down like that. The bullet points certainly help.
How does more money in the money market = lower interest rates?
I closed all of them. Looking for another opportunity to get in, maybe US inflation event tomorrow.
Oh nice. Did you get in last week? Good moves then too. Retail Sales tomorrow!
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Ummm, yes I did but it’s not a good profit, today is BOJ Interest Rate Decision, I’m looking for this event, it’s not sure, BOJ will be surprised the market or not.
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