The rescheduling of the Bank of Japan’s next Policy Board meeting to Thursday and Friday this week was surely designed to provide an early opportunity to assess any market fall-out from the US Fed’s announcement tomorrow. We suspect that, other things being equal, the Bank would respond to a decisive move in the yen through 80 to the dollar by enhancing its own programme of QE. However, this would probably take the form of an acceleration in the planned asset purchases of ¥5 trillion rather than an increase in the total. The Bank’s response would also depend on the reaction in global equity and bond markets.
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