BoJ being even more patient but.../CAC back to flat/Gary Friedman comments and more

Open Webster's Dictionary under the word 'patient' and the Bank of Japan is still listed there. Just as we thought overnight there would be an announcement on cutting QE, Governor Ueda said we have to wait until July. On the flip side, he also said that when it comes it could be big and a rate increase could come next month too. 

On QE, "In trimming bond buying, it's important to leave flexibility to ensure market stability, while doing so in a predictable form." Interestingly he did say the cut in purchases would be "significant." On a possible rate hike, "Depending on economic and price data that become available at the time, of course there is a possibility we could decide to raise interest rates and adjust the degree of monetary support in July."

Governor Ueda also gave notice to the FX market, likely encouraged by the Finance Ministry, and said "Exchange rate moves would have a big impact on the economy and prices. Recent yen falls have an effect of pushing up prices, so we are closely watching the moves in guiding policy."

The market's reaction was immediately a plunge in JGB yields and drop in the yen but when markets realized that Ueda is setting us up for a possible notable move at the end of July, the moves reversed. 

Intraday 10 yr JGB move

Intraday Yen move

Notable today too overseas was the French CAC which is down almost 3% and has given back its entire 2024 stock market rally ahead of the early parliamentary elections in late June/early July.