Pimco makes bold yen buying move, forecasting Bank of Japan monetary tightening

<p>Bloomberg carry the report saying that giant hedge fund Pimco is buying the yen, projecting that the Bank of Japan will be pressured into tightening monetary policy as inflation quickens.</p><p>more to come</p><p>Via the report (Bloomberg is gated, this in brief)</p><ul><li>Pimco started building a long yen position above 140 from a few months ago</li></ul><p>Emmanuel Sharef, a Pimco fund manager said</p><ul><li>“As we continue to see inflation in Japan rising and being steadily above their target, they will want to move in the direction of abandoning or changing their yield-curve control policies and eventually there might be a need for a hike,” </li><li>
“Inflation in the US is coming down, and inflation in Japan is still elevated. Within our framework, that naturally creates a yen long.”</li><li>“I can’t predict exactly what they’re going to do but the need is there to continue to tighten policy in some form,”</li><li>“It could take the form of an additional easing step that’s more gradual. It could take the form of an abandonment of YCC and then eventually potentially a hike as well.”</li></ul>

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