The Bank increases the total size of the Asset Purchase Program by about 10 trillion yen, from about 55 trillion yen to about 65 trillion yen. The increase in the Program is earmarked for the purchase of Japanese government bonds. By fully implementing the Program including the additional expansion decided today, by the end of 2012, the amount outstanding of the Program will be increased by about 22 trillion yen from the current level of around 43 trillion yen.
We posted last month that long dollar/yen was one our favorite macro trades of the year. Still do and think the move is just getting started, but always with a stop as we could be wrong.
The generational low is in on dollar/yen, in our opinion, and yen weakness has helped the Nikkei recapture its 200-day moving average and put in its best February since 1991. We will be back to you with more analysis.
(click here if chart is not observable)