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5 Apr 2013
Forex Flash: BoJ edges Fed in monetary aggression – Deutsche Bank
FXstreet.com (Barcelona) - In Dollar terms (using current spot FX rate), Japan's plan is to buy about $72bn in assets per month (JPY 7trillion using current spot rate), or about $864bn a year. By comparison, the Fed is purchasing about $1 Trillion a year ($85/month x 12) at the moment.
We can also compare this with their respective GDP. Annual US GDP is around $15Trillion and Japan's around $5.9Trillion so annual purchases by the Fed and BOJ are about 6.8% and 15% of their respective annual GDP. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Thus, the BoJ are arguably being more aggressive than the Fed at a time when many analysts are trying to work out when the Fed slows or stops purchases this year.”
The scale of yesterday's move surprised the market with its scale and the Nikkei (+3.4%) is moving sharply higher again overnight and is now an impressive 6% higher from the pre-BOJ levels yesterday.
We can also compare this with their respective GDP. Annual US GDP is around $15Trillion and Japan's around $5.9Trillion so annual purchases by the Fed and BOJ are about 6.8% and 15% of their respective annual GDP. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Thus, the BoJ are arguably being more aggressive than the Fed at a time when many analysts are trying to work out when the Fed slows or stops purchases this year.”
The scale of yesterday's move surprised the market with its scale and the Nikkei (+3.4%) is moving sharply higher again overnight and is now an impressive 6% higher from the pre-BOJ levels yesterday.