JPY: Too Early To Think About BoJ Exit Plan; Too Early To Call JPY Strength N-Term – CIBC

CIBC FX Strategy Research notes that the BoJ hasn’t been inhaling bonds at quite the same pace recently, and that has some thinking a subtle change in policy is afoot.

In that regard CIBC argues that it seems premature for the BoJ to be pulling back.

"Indeed, both wages and inflation continue to disappoint. The slowing in bond purchases is likely simply a reflection of the BoJ’s yield curve control policy requiring fewer bond purchases to keep interest rates in check," CIBC adds.

"As a result, we tend to believe that it’s still too early to think about an exit plan. That likely means it’s also still too early to call for JPY strength in the near-term," CIBC concludes.

Source: CIBC Economics – CIBC Capital MarketsOriginal Article