Bank of Japan meeting over the next 2 days – Volatility coming?


The last 2 Bank of Japan (BOJ) meetings have meant volatility en masse for not only Japan ( EWJ , quote ) (Nikkei and Yen) but also for global markets.

In fact the disappointment surrounding the June policy meeting, combined with Fed rhetoric, took most risk assets to their lows in July.

Emerging markets certainly were carried out in a stretcher.  Kuroda will summarize this week's BOJ event with a speech tomorrow.  The question for markets is will this time be different?

Right now we get the purpose and direction of Abenomics, but we are still struggling the whether the "third arrow" can hit a bulls eye, or if it will miss the target and puncture market psychology.

In May the Nikkei moved 17% from the policy meeting/Kuroda commentary to the lows before finding a footing, and in June the move was 7.75% to the lows.

Low hanging fruit is off the vine in terms of rhetoric and mild policy change.  Japan still needs a major overhaul of its regulation and industry controls to lift the economy out of stagnation.

I have to say I'm a little surprised by the relaxed approach people are taking to the BOJ meeting this week when the last 2 events were epic in terms of their impact.

It might be time to hedge up a little bit.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , International , Stocks

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