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Flash: Japanese markets settle despite cataclysmic Thursday – Deutsche Bank

FXstreet.com (Barcelona) - According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Thursday's BoJ press briefing on the EMR suggested that gains in yields could be expected as the economy improved.”

This was after previously saying that the BOJ was aiming to lower interest rates. This confusion accelerated the sell-off which helped lead to the 7.32% fall in the Nikkei on Thursday. This morning we initially saw calmer markets largely thanks to a relatively steady performance in the US session overnight.

In addition, 10 year JGBs are more stable at 0.83% but did briefly touch 1% late yesterday. Speaking at a parliamentary session overnight in Tokyo, Japanese PM Shinzo Abe declined to comment on yesterday's drop in Japanese equities and said he expects the BoJ to have appropriate communications with financial market participants. Shortly after, Kuroda said that the BoJ will continue with its efforts to end deflation and the BoJ will stablise the bond market with "flexible operations".

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