TOKYO – Did the Bank of Japan (BOJ) just cry “uncle!” as it widened its bond-trading band and signaled its throttling back on stock buying?
No. But Friday’s mild tightening moves by BOJ Governor Haruhiko Kuroda suggest Tokyo realizes what it’s been doing these last few years isn’t working.
More broadly, the implications of Kuroda’s ploy have hit markets that are geographically far removed from BOJ headquarters in Tokyo.
In true “butterfly-wing” fashion, the smallest of ripples in Tokyo was enough to catch a fragile, jittery and frankly vulnerable US by surprise and prompt a “risk-off” trade.