BOJ hits policy brickwall
Bloomberg is reporting that Daisuke Uno, Tokyo based chief strategist at Sumitomo Mitsui Banking Corp is saying the USDJPY could hit 85.00 as the BOJ policy hits a brickwall. He speculates that the BOJ may drop its 2-year plan for its inflation target.
- The BOJ will blame external forces like lower oil prices and a slowing global economy for its inability to meet its 2% inflation goal despite correct policy action
- The BOJ may change its annual bond purchase target to a range of 70t to 90t yen from the 80t yen.
- BOJs decision to increase ETF purchases on July 29 without other major policy changes shows its limitations
The USDJPY peaked at 125.845 in May of 2015. The 50% of the move up from the 2011 low comes in at 100.582. The current price is at 100.50.
I don't rule out anything (hence why I let the price and technical tools tell most of the story), but the USDJPY moving down to 85.00 will hurt the Japan export market, and lower import prices at the same time. What do you think? Is it in the cards?