The Bank of Japan keeps its monetary policy unchanged as expected, with an 8-1 vote. The only dissenter was Kuuchi. The BOJ also stood pat and kept its pledge to increase its QE at a massive pace of 80 trillion yen annualy($650 billion). BOJ Governor Kuroda asserts his view that the economy will rebound and is recovering despite the weak sectors and stated that the main reason for the 3rd QTR GDP contraction was declining inventories. He adds that corporate capital expenditures (CAPEX) will rebound and insist that CPI will reach their 2% target in the second half of 2016 and stress that there was no change to his expectations. He said that they would only consider more easing if inflation weakens further. Kuroda said that there was never a specific timing set on how long ther quantitative easing programme will last.
The BOJ statement was suggestive that there would be no new quantitative easing in the near term future and thereby gave reason for the market participants to buy the yen. Dollar yen fell from 123.52 to 123.10 following the BOJ statement and eased further to 123.00 in Europe.
Chart: WorldWideMarkets Alpha Trader