Currency options traders expect the Bank of Japan to join central banks around the world, like the Swiss National Bank (Central Bank), this week to upset the market with monetary policy surprises.
With the BOJ’s policy-making meeting on the 17th, demand for hedging the daily price fluctuations of the yen has been at its highest level since March 2020, and traders have already seen the yen’s price rise in March 2020. It also sees the potential to play the most prominent rise since the month. On the 16th, the Swiss central bank announced an unexpected rate hike for the first time in 15 years. The Swiss franc is expected to be the highest since January 2015, when the cap against the euro was lifted.
Swiss central bank raises interest rate since 2007, policy interest rate minus 0.25% -unexpected (1)
Japanese policymakers are expected to continue monetary easing, but global markets are increasingly observing the possibility of shocking policy decisions.
The Bank of Japan, which has been controlling the yield curve since 2016, has indicated that it will aggressively keep the upper limit of yields for the past few days, but the Bank of Japan has raised interest rates since 1994 by the U.S. financial authorities. There is increasing pressure to provide guidance on when to change this policy stance or when to stop the policy. The yen has risen sharply against the dollar on the 16th.
“Since the Bank of Japan is now the last central bank in terms of easing policy, it is not surprising that there is a growing view in the market against the Bank of Japan’s policy,” said Jeremy Stretch, head of G10 currency strategy at CIBC. Pointed out in the report. The Bank of Japan expects to maintain its current policy, but said that “if any adjustments to the yield curve control (YCC) are suggested, it will lead to a significant recovery in the yen’s valuation.”
news-rsf-original-reference paywall">Original title:
news-rsf-original-reference paywall">Traders Bet Dovish Bank of Japan to Capitulate After Swiss Shock（抜粋）
