Yen jumps as BOJ shocks; China stocks gain on stimulus hopes

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The yen gained in volatile trade on Friday and stocks and bonds dropped in Tokyo after the Bank of Japan made another baby step away from years of ultra-loose monetary policy, while hopes for stimulus had Chinese stocks heading for their best week of the year.

maintained its super-low interest rates but shifted slightly on yield curve control, saying its 0.5% limit on 10-year government bond yields was now a "reference" and offered to buy such bonds at 1% in the market instead.

The yen which had gained for days on speculation of a BOJ move, was choppy after the announcement, before gaining to hit a week-high of 138.05 to the dollar. The BOJ repeated that inflation is not sustainably at its 2% target and forecast it below that level in 2024 and 2025, even though data showed"It is an important step towards eventual disbandment," said Tom Nash, a fixed income portfolio manager at UBS Asset Management in Sydney. "I expect yields will gravitate towards 1% but not get there in a straight line as you're likely to get short covering, domestic buying and the BOJ leaning against it.".

 

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Stocks slip, yen surges on speculation of Bank of Japan policy tweakAsian stocks were off five-month highs and the yen extended a sharp rally on Friday with speculation that the Bank of Japan could take another small step toward dismantling its super-easy stimulus policies.
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