Bank of Japan (BOJ)
Japan's central bank, responsible for monetary policy, interest rate decisions, and maintaining financial system stability.
The Bank of Japan sets Japan's monetary policy, including rates and asset purchases. Decades of ultra-loose policy, including negative rates, have made the yen a favourite funding currency.
The Bank of Japan is Japan's central bank and one of the most influential institutions in global forex markets. It sets the country's monetary policy, including interest rates and asset purchase programmes. The BOJ is known for maintaining ultra-loose monetary policy for decades, including negative interest rates and yield curve control, which has made the yen a popular funding currency for carry trades.
How It Works
- Sets the overnight call rate (Japan's benchmark interest rate)
- Conducts yield curve control to cap long-term government bond yields
- Intervenes in forex markets to manage extreme yen moves
- Publishes Tankan business surveys used as leading economic indicators
Trading Tips
BOJ meetings can trigger sharp moves in JPY pairs, especially USD/JPY
Watch for intervention warnings when USD/JPY moves too fast in either direction
The BOJ's ultra-loose stance has made JPY a popular carry trade funding currency
Related Terms
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