What is the Bank of Japan thinking? Yen...

Check out these tweets from my today´s selection (note: BOJ stands for Bank of Japan):

- BOJ Governor Warns Central Banks from Risks of Low Rates.
- BOJ Crosses Rubicon - Desperate Monetary Policy.
- “They looked like really desperate measures,” Eiji Hirano, 61, who was a BOJ executive director (Bloomberg).
- BOJ chief warns of adverse side effects from monetary easing.

And so on... What´s going on?

If you have the time to read it, we seriously recommend to check out the BOJ Governor´s speech two days ago (click here for the link in English). Mr. Shirakawa blames the financial imbalances not only on the loose interest rates but the lack of regulation. He believes both should work together. He pinpoints the role of "lender of last resort", which has been very effective. However, in a polite way, he is not so sure the continuation of a relaxed interest rates policy could be useful anymore. It leads to a real increase in commodity prices. What he makes clear is that all Central Banks are playing the same game together. Right now the FOREX market is under surveillance, so we don´t expect any high volatility movement in a close future. Slightly we may start seeing coordinated small increases in interest rates in all countries.

It seems they want to show us everything is under control. However, at the same time, BOJ has decided to expand its bond-purchase program (who wants their bonds now?). You can read the article here. Two forces against each other trying to sign up a peace treaty...

We will keep you updated through this web and our Twitter: @simplynorisk.