Yen Firmer In Volatile Trade Post-BOJ

The Yen is now sitting firmer in post-BOJ trade after see-sawing as participants digested the decision. The BOJ tweaked YCC to be flexibly managed, in effect, the BOJ says that the +/- 0.5% range around 0% in the 10-year JGB will be a “reference, not a rigid limit”. However, there will be a strict yield cap for fixed rate operations at 1.0%. That effectively makes the band the 10-year JGB can trade in much wider than anyone expected.

• USD/JPY see-sawed on the decision initially falling printing a low at ¥138.63 before firming to a high of ¥141.94. The pair now sits ~1.8% below its post meeting peak, however has ticked away from session lows and sits at ¥138.35/45.
• AUD is pressured, the post BOJ flows have spilled over into risk off flows seeing the AUD extend early losses. June Retail Sales fell 0.8% vs a 0.0% expected print. The pair has broken support at $0.6651, the low from July 11 and last prints at $0.6645/50.
• Kiwi is also pressured, NZD/USD is down ~0.5% as risk off flows weigh. The next support level is $0.6051 the low from 29 June.
• Cross asset wise; 10-Year US Tsy Yields are ~3bps higher and e-minis are down ~0.1% having been up as much as 0.3% early in the session.
• French CPI and Regional CPI from Germany provide the highlight in todays European session.