Bank of Japan puts off big asset buying until January 2014 temporarily reversing the yen’s decline

Today the Bank of Japan gave in to political pressure and raised its inflation target to 2% from 1% as “recommended” by Japan’s new Prime Minister Shinzo Abe. But the bank delayed a huge program ($146.6 billion a month) of asset purchases until January 2014. Today’s market reaction in Tokyo says investors think the delay is very temporary

Euro climbs against both the dollar and the yen, and looks set to continue that trend

The European Central Bank clobbered the U.S. dollar and the Japanese yen today when it left EuroZone interest rates unchanged at 0.75%. In trading today the euro climbed 1.4% against the U.S. dollar to $1.3252, that’s the highest level since July 5, 2011. The euro also rose 1.9% against the yen. The yen fell against the dollar as well to 88.41, the low since July 2010.

Is today a turn in Tokyo markets that puts Japanese stocks back in rally mode?

One day doesn’t a rally make, butfter sagging for two days, shares in Japan and China are up today. The Shanghai Composite Index was down 0.03%, essentially unchanged. Today’s action re-enforces my belief that the decline in the first two days of the week was the normal pause that follows on a big advance like that recorded by the Tokyo market since the nid-December election.