Week Ahead – Markets quiet down for holidays, liquidity in control
A quiet week lies ahead for FX markets as the year draws to a close. The spotlight will fall on the Bank of Japan’s summary of opinions, which will add some color around the recent decision to raise the yield ceiling that propelled the yen higher. More broadly, liquidity will be in short supply, making sharp market moves possible without any news catalyst. In a surprise move, the Bank of Japan adjusted its yield curve control strategy this week, widening the range in which long-dated Japanese yields are allowed to trade. Governor Kuroda downplayed the action as simply ‘fine-tuning’ of policy to ensure smooth
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