BOJ Opens ‘Pandora’s Box’ for Traders on Alert for Another Shock
- December shock has clouded outlook for investor expectations
- Bond market liquidity has worsened since curve control tweak
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Investors are on high alert for further policy tweaks from the Bank of Japan this week after December’s shock decision to raise the bar on yield movements failed to significantly improve market liquidity.
While almost all economists surveyed by Bloomberg expect no change at the two-day meeting finishing Wednesday as their main scenario, market pressure on the central bank’s stimulus framework has intensified since last month’s efforts to ease the side effects of policy.