The Bank of Japan came and did nothing but sound hopeful enough about the outlook for wages and inflation, and negative enough about the side effects of negative rates and yield curve control, to suggest a policy change will be forthcoming after the end of Q1, and by the middle of the year. 

The market has read the story of the boy who cried wolf often enough to be a little sceptical but the Yen is helped by a quieter US bond market and by talk of a Chinese plan for equity market support, totalling under 1% GDP, financed by using state-owned companies’ foreign currency holdings. In other words, de facto FX reserves are being repatriated.

We’ll stick to a (fingers firmly crossed) view that USD/JPY has peaked and that we will see a return to levels below 140 in Q2.