Rates as of 0500 GMT
The two central bank meetings over the last 24 hours were not the main thing pushing the FX market.
The Bank of England was as featureless as I had expected. The votes were unanimous to keep both rates and bond purchases unchanged. The minutes highlighted the improvement in the outlook compared to February thanks to the vaccine rollout, US and UK fiscal easing, and less of a January hit from lockdown than expected, but the Banks forward guidance still says that there will be no tightening until significant progress is being made in achieving the 2 inflation target sustainably. Heaven knows when that might be.
The Bank of Japan BoJ on the other hand was as interesting as I had hoped, but Im not sure how much it impacted the currency market. They certainly delivered on their pledge to make policy more flexible and increase its durability so that the BoJ can continue to support the reflation effort. Many of the changes were in line with leaks that appeared in the press beforehand, as is normal in Japan, the country where pleasant surprise is an oxymoron.
The three major themes that they addressed and what they did were as follows
More effective purchases of equity Exchange Traded Funds ETFs they abandoned their pledge to buy at least 6tn a year in ETFs while keeping the ceiling of 12tn. That means they wont have to buy into a rising market. They also said theyd only buy ETFs linked to the TOPIX index, a marketcap weighted index of all…