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What does the BOJ wish for most? USD/JPY and Nikkei 225 in focus here

Following on from an earlier update here today on the USD/JPY, let me now add some more colour on what might lie behind the latest BOJ rhetoric. As you now know, earlier today the deputy BOJ Governor, Mitsuko Uchida made it pretty clear; that even if the BOJ does abandon its zero interest rate policy, there will be no rush to raise interest rates. As you now also know, these comments help to push the Nikkei 225 to a new 34 year high earlier today. It also sent the Yen lower, as was to be expected. Given the gains to above 151 last year and the year before in the USD/JPY there is evidence of the BOJ attempting to draw a line in the sand up there. That said, the Nikkei retuning close to levels not seen since 1990 is something very much desired by Japanese authorities too. The collapse in the Nikkei to near 7000 that followed from gains close to 40,000 have taken more than a quarter of a century to correct. What is also clear; the BOJ cannot have their cake and eat it. If they want more upside in the stock market, then the Yen will have to take the strain or those gains in the Nikkei might stumble, if they were to raise interest rates aggressively. So, what is the BOJ trying to tell the markets? I think I get the message and now we wait to see if the USD/JPY will take the strain more as the day unfolds. It is currently trading at 148.84

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