BoJ surprised as it announced an expansion in QQE
BoJ surprised as it announced an expansion in QQE, quantitative and qualitative easing, by a vote of 5-4. USD-JPY surged higher to hit a peak of 110.29, while the 10-year JGB fell to 0.435%, the lowest since April 2013. The Bank is now targeting an annual pace of of expansion in the monetary base of about 80 tln JPY, up about 10 to 20 tln from the prior amount. The Bank will also increase its purchases of JGBs to an annual rate of about 80 tln JPY (up about 30 tln from the prior rate). This will extend the average remaining maturity by about 3 years maximum to about 7- to 10-years. The BoJ also announced it will increase its purchases of ETFs and J-REITs. The Bank noted that the economy has continued to recover moderately and is expected to continue to do so. However, prices have been trending lower given weaker demand following the tax hike and a substantial decline in crude oil prices
