At its December monetary policy meeting, the Bank of Japan (BOJ) left its policy settings unadjusted once again but decided to scale back pandemic stimulus upon reaching March 2022 deadline.

The BOJ decides to taper corporate bond and commercial paper buying.

The BOJ maintained its short-term rate target at -0.1% and that for 10-year bond yields around 0%.

Markets had priced in the Japanese central bank to dial back emergency pandemic funding, as the economy is gradually healing from the coronavirus crisis.

Key takeaways

Market reaction

USD/JPY remains unfazed near daily lows of 113.60 on the BOJ’s announcement, down 0.05% on the day.