PREVIOUS TRADING DAY EVENTS 28 April 2023

Announcements 

The Bank of Japan BOJ caused turmoil in the market for JPY on the 28th of April with the release of the monetary policy report and interest rate decision. The BOJ left its interest rates unchanged. This was in line with the economists expectations. The rate has been held at 0.1 since the central bank took rates below zero in 2016. JPY depreciated greatly, with pairs moving greatly in one direction. USDJPY moved nearly 260 pips upwards. Japanese bonds and stocks rallied.

BOJ also announced a plan to review its past monetary policy move. The new 71yearold governor who took office this month, Kazuo Ueda, has room to make future changes but it seems that he is in no rush to do so. In a news conference, the new chief said the broadbased review wouldnt be tied to nearterm policy shifts and stressed the need to wait for more evidence to conclude inflation would sustainably achieve the BOJs 2 target.

While trend inflation is gradually heightening, it will take some time to achieve our inflation target, Ueda said after the BOJs widelyexpected decision to make no changes to its yield curve control YCC policy.

The risk of missing our price target with premature monetary tightening is bigger than the risk of experiencing inflation exceeding 2 due to a delayed tightening. The cost of waiting for trend inflation to heighten is low, he said.

The fact that the BOJ left a reference to further easing as needed confirmed…