As per Reuters report, the Bank of Japan is set to keep key policy tools unchanged at next week’s rate review in order to curb bond market instability.
The BOJ stunned markets January 29th by deciding to cut rates into negative territory. The decision led to 250-300 pip drop in Yen, which was quickly undone in the following three trading sessions. The move turned out to be a dud, since it failed to weaken Yen and prop up stock markets.
Since then, speculation has been rife about the possibility of an expansion of QE program.
Key points
Negative rates have proved very powerful in pushing down bond yields
The BOJ doesn’t intend to keep cutting rates frequently at a set timing
(Market News Provided by FXstreet)