BOJ: reading Kuroda has never been this hard - FT
The Financial Times (FT) carried a story on Thursday, underscoring the uncertainty surrounding the BOJ’s intentions on the monetary policy and what it’s going to do at its September 20-21 meeting.
Key Points:
“Rarely has the market been quite so unable to admit and characterise the uncertainty over what the Bank of Japan is going to do at its September 20-21 meeting and what its governor, Haruhiko Kuroda, will then conclude in his “comprehensive assessment” of the central bank’s policy of monetary easing.”
“But these are profoundly unusual times, say the traders, noting the fact that after eye-catching flattening of the yield curve in July, longer dated bonds last month suffered their longest losing streak since 2013.”
“This week, the extent of the confusion surrounding the BoJ’s intentions played out in the sale of 30-year JGBs. Ahead of Tuesday’s auction there was widespread concern demand would be weak.”
“Underlining that is a set of assumptions that could be brutally tested in two weeks’ time.“
“The market, in what may be a display of greater confidence than it really has — and which analysts say demands a convoluted reading of Mr Kuroda’s most recent comments — appears to be betting the central bank will not take the world’s third-biggest economy any deeper into negative interest rate territory.”