FX Action: The yen dove sharply on shock BoJ easing
FX Action: The yen dove sharply on shock BoJ easing, which saw USD-JPY spike a six-year peak of 111.19, well up on yesterday's 108.90 London closing level. EUR-JPY rallied by around two big figures to a five-week high at 139.76, and other yen crosses saw a similar price action. The BoJ announcement of an expansion in QQE (quantitative and qualitative easing), by a vote of 5-4, came as a complete shock to markets. Aside from causing the dive in the yen, the Nikkei stock index surged by nearly 5% and the 10-year JGB fell to the lowest levels seen since April 2013 of .435% (in the case of stocks, there was also a report by Reuters, citing sources, that Japan will give approval to the government pension fund's plan to increase equity holdings). Elsewhere, the dollar posted moderate gains against the euro, sterling and Aussie. Yesterday's above-forecast GDP figure out of the U.S. and the slightly hawkish tone of Wednesday's Fed statement ensured that the dollar was the long vehicle of choice for yen sellers. EUR-USD ebbed to a low of 1.2557, bringing yesterday's three-week low at 1.2546 back into scope