Wednesday, the Japanese yen rose against the greenback due to new indicating that the BoJ or the Bank of Japan had bought bonds in its regular market slightly fewer than the last time. The yen settled at 107.15 yen JPY= against the U.S. dollar which was 0.19% higher from the Japanese currency’s previous settlement.
This positive stance of the yen was brought by BoJ’s move to buy a slightly smaller bonds in its regular market operation, the Bank of Japan bought 70 billion Japanese yen worth of bonds maturing in more than 25 years, which was lower from the 80 billion Japanese yen worth of bonds from its previous operation on February 23, 2018. Despite of this, Japan’s buying at all other maturities remained the same.
This highlighted the hot market atmosphere over the safe-haven yen right now. According to data, the BoJ’s balance sheet has been swelling by stimulus activities and liquidity management where it rivals the country’s annual GDP.
Analysts are speculating that the Bank of Japan will need to to decrease its stimulus program before inflation touches the 2% annualized level which is a level which indicates the withdrawal of the country’s monetary accommodation.