After the Dow reaches 20,000, focus on the BOJ meeting — from YEN-kura's “Real Top Trading”.

The Dow has reached 20,000, and the U.S. 10-year Treasury yield has risen to around 2.5%, but it has not translated into a stronger dollar.
The USD/JPY fell to around 113, then rose to around 114, but the 113-114 range continues.

In today's Bank of Japan government bond purchases, because the market's expected purchases of remaining 1 year or more up to 5 years were withheld, bond futures temporarily dropped to 149.85 sen, the lowest in about a month. The 10-year yield also rose briefly to 0.08% and finished at 0.065%.
There was also dollar selling at the fixing, but the rise in long-term yields appears to have been a factor weighing on USD/JPY.

A BOJ official says the decision was made after observing supply and demand in the government bond market, but there is also the BOJ policy decision meeting on the 30th-31st next week.
Since September last year, the BOJ has shifted from quantitative easing of 80 trillion yen in government bond purchases to yield curve control (management of long- and short-term interest rates), with policy targets of a short-term rate of -0.1% and a 10-year yield of 0%.
A decrease in the number of government bond purchases equals tapering and could put upward pressure on long-term yields and become a factor supporting yen strength.

These factors may be weighing on the upside of the USD/JPY, and I will be watching to see if there is discussion of these at next week's BOJ meeting.

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