The Bank of Japan met during the 5/22 Asian session to discuss monetary policy. The market has been pricing in more stimulus even though Shirakawa had spoke again st it. The BoJ added 10 tillion yen to its asset purchase program last month to make it 40 trillion yen, but kept it there this month. The overnight lending rate was also left below 0.1%.
The market did the classic y the rumor sell the news here with the USD/JPY. After cracking 80.00, the USD/JPY remained below a declining trendline and failed to push higher after the BoJ announced its policy stance. The USD/JPY fell from just above 80.00 to 79.35 as we gear up for the 5/23 US trading session.
You will hear news about officials still talking about stimulus needed. You should remember that at these levels the below 80, JPY strength hurts exports and officials would love for the market to believe in more stimulus and keep the JPY from strengthening further.
USD/JPY 4H Chart 5/23/2012 7:27AM EDT
Prevoius: D/JPY - Buy the Rumor Sell the News?
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