USD/JPY is trading below the 132 mark again after reports that the Bank of Japan was planning to review the side effects of massive monetary easing. This is very relevant, in the view of Esther Reichelt, FX Analyst at Commerzbank.

BoJ review of monetary policy side effects

“The FX market obviously interprets today's announcement as making an end to ultra-expansionary monetary policy in Japan marginally more likely. While this is not a compelling conclusion from the announcement alone, it is likely to increase the focus on the news flow out of Japan.”

“The exact nature of the assessment of side effects promises more clarity about the motivation behind the yield target adjustment and could provide the decisive directional impulse for JPY exchange rates.”