Limited Gains On BBG BoJ Sources Story Pared

A limited rally for the JPY is quickly reversed, with the major XXX/JPY pairs back towards session highs.

• The JPY initially rallied as BBG sources noted that “BoJ officials are edging closer to raising interest rates and will decide whether to move this month.”
• However, the piece went on to note that “the outcome currently too close to call” and stressed that Friday’s initial tally re: Japan’s Spring wage talks will be key.
• These ideas have already been heavily discussed in recent days and a March hike is currently ~65% priced.
• This meant that a quick 30 pip fall in USD/JPY was pared.
• The details of the story point to split between this month and next month re: a rate hike.
• The story also notes the potential for hawkish guidance, preparing markets for a hike, in the case of no hike next week.
• The piece suggests that some are cautious re: hawkish perceptions if the BoJ does hike next week.
• All in all, this BBG story doesn’t provide much new information.