ForexLive Asia-Pacific FX news wrap: BOJ formalises 1% 10year JGB yieldcap, USD/JPY to 150

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USD/JPY
retraced much, but not all, of its overnight move lower in the lead-up to the Bank of Japan statement. The USD traded a touch higher
against other major FX also. The yield on the 10 year JGB approached
1.0% ahead of the statement, following the Nikkei report on
Monday, US time, that the BOJ would extend the yield tolerance limit
to 1.5%.
</p><p>The
Bank of Japan Statement made a minor tweak to policy, that the 1% cap
for 10-year JGB yields was set more formally in place, from 0.5%
previously. The 1.5% cap mooted by the Nikkei did not come to
fruition. USD/JPY was marked higher, back to 150 on the announcement.
With added flexibility to the JGB cap the BoJ is looking to hold
ultra easy policy in place for still some time to come.</p><p>Check
out the post on the Statement above, the summary points contain
revisions made to the bank’s forecasts for inflation ahead, higher;</p><ul><li>
core
CPI fiscal 2023 median forecast at +2.8% vs +2.5% in July</li><li>
core
CPI fiscal 2024 median forecast at +2.8% vs +1.9% in July</li><li>
core
CPI fiscal 2025 median forecast at +1.7% vs +1.6% in July</li></ul><p>How the Bank of Japan explained the 1% cap:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.