It’s been an interesting afternoon for forex traders with USDJPY trading down to 120.40 after Governor Haruhiko Kuroda and his colleagues at the Bank of Japan (BoJ) voted 8-1 to keep the current stimulus program of expanding the monetary base at a rate of 80 trillion yen per annum.
That fall suggested forex traders were betting the BoJ might take the opportunity to increase the stimulus program to get the economy going and drive the Yen lower. USD/JPY, which had rallied up to a high of 121.13 earlier today fell to 120.40 (USDJPY falls when the Yen strengthens) before recovering sharply.
What seems to have driven the turn around, and sharp Yen selling, was news on Bloomberg Terminals of a Nikkei report the Japanese government is considering a pumping more money into the economy with a fresh 3 trillion Yen stimulus package.
That’s taken stocks in Tokyo higher with the Topix and Nikkei both up more than 1.1%.
Governor Kuroda is holding a news conference at 06.30 GMT (17.30 AEST).