Pay Attention To What BoJ Did Do

by Jeffrey P. Snider
Alhambra Partners

As if a mirror of the Federal Reserve, what is more important from the Bank of Japan flop today is what it did do rather than what it did not. Everyone was looking for at the very least an even quicker pace to QQE if not the full-blown “helicopter” of momentum dreams. Instead, BoJ offered what appears tepidity. As widely expected, their ETF buying program was expanded to ¥2.7 trillion annually, but that wasn’t the end of the submission. The only other change was to double a “dollar lending” program that few knew existed.

In April 2012, the Bank of Japan policy statement included the official approval of a plan to extend dollar loans from its supply of dollar “reserves” to eligible Japanese companies obtaining overseas finance.

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