COMMENT-Yen struggles to buy the BoJ rumour

Another round of Bank of Japan sources leaning towards an exit from negative interest rates at the March meeting. However, the impact of these source reports on the yen are diminishing with the initial knee-jerk move lower in USD/JPY retraced quickly.

Although, with U.S. yields grinding higher, the benchmark 10-year now back at the March high and thus weighing on the yen, this further emphasises that yields matter more.

That said, what the source reports do is reduce the surprise element for the official announcement, as was the case both times that the BoJ tweaked yield curve control in 2023 . As such, with the yen struggling to buy the rumour, this raises the risk that the currency will be sold on the fact

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