In an effort to counter a rise in short-term interest rates, the Bank of Japan (BOJ) intervened in the money market and offered two schemes to pump a combined $97 billion via temporary government bond purchases.

Key takeaways

“The central bank on Tuesday made two offers, including one to buy bonds worth 2 trillion yen for immediate fund provision. Under another offer, it would buy 7 trillion yen to inject funds for a period between Dec. 15-16.”

“Both offers have arrangements to sell the bonds back.”

Market reaction

USD/JPY fell sharply to 113.49 on the BOJ’s operation before recovering ground to now trade flat at 113.57.