JPY is growing. Overview for 20.12.2022

The Japanese yen has grown quite a bit against the US dollar. The current quote is 132.60.

At today’s meeting, the BoJ decided to keep the interest rate without a change at -0.10% a year.

What came as a surprise was the announcement of an unlimited purchase of one to five-year bonds. The sum meant to spent on it from now on is 600 billion yen. On one to three-year bonds, three to five-year bonds, and ten to twenty-five year bonds, 100 billion Japanese yen will be spent, respectively. 300 billion yen more will be spent on five to ten-year bonds. Extra bond purchases are scheduled for 22 December.

The Bank plans to react to each bond issuing, to increase purchases, and expand volumes of operations with fixed-rate securities, when necessary. Moreover, the Bank of Japan will set a fixed rate for auctions with ten-year bonds.

For the yen, everything happening is interventions, either open or hidden.

A peculiar situation has formed: the BoJ decided against changing its ultra-soft policy but brought the debt sector out of balance totally, thus supporting the JPY.