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BOJ’s Kuroda Sends the USD/JPY Popping Above 106, After Confirming That They Will Keep Buying Bonds
The USD/JPY was finding support at the 20 SMA (gray) on the daily chart yesterday, while today that pair has jumped higher, climbing above 106 for a while. The head of the Bank of Japan, Kuroda, fueled the bullish move further today, promising to keep buying bonds for an unlimited time.
He doesn’t see any problems in Japanese corporations if the BOJ continues to buy bonds for as long as it is necessary. These comments have sent the JPY down, which, in turn, has pushed the USD/JPY further up. So, the long-term trend seems to be turning bullish now, which means that we should buy the pullback lower, probably at the 20 SMA. Below are Kuroda’s comments:
Further remarks by Kuroda
- ETF purchases not significantly crippling market functions
- Does not think ETF purchases cause serious corporate governance problems
- Aware of the view that ETF purchases may lead to a decline in stock market function
- BOJ is not targeting any specific levels with their ETF purchases, but as long as they keep up the buying, it just means current levels are not enough
- Bond purchases are for monetary policy purposes, not for the government
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