JPY: Outperformer for this week - Nomura

JPY has been an outperformer this week, trading strongly after the BOJ’s further stealth tapering, points out the research team at Nomura.

Key Quotes

“The decision has actually widened rate spreads, as foreign yields reacted more positively, but the higher implied volatility of JGBs is likely hurting USD/JPY. The BOJ’s next action will be important. If the BOJ conducts another fixed-price JGB purchase operation at unchanged yield levels, volatility may calm down, supporting JPY crosses.”