Bank of Japan with no news

One recurrent theme now is the helplessness of the central banks. Yesterday SNB was at this juncture. Today it is the turn of another case that is at least as severe, the Bank of Japan. 

Both banks initially have one thing in common, they refuse to accept the reality, at least in public. At least the BoJ is pursuing the most far reaching QE programme the world has ever seen. However, there is no sign of rising inflation. As the majority of analysts had expected the BoJ stuck to its previous course today. 

It will continue to buy bonds amounting to JPY 80 trillion per annum. It also left its statement nearly unchanged. JPY reacted with slight gains to the news. Clearly some market participants had expected the programme to be extended. 

"However, what effects an extension would have is doubtful, if the BoJ is already buying assets corresponding to 16% of GDP per annum. The FX market is now going to focus on 30th October as the BoJ will be presenting its new growth and inflation outlook at its next meeting that day", says Commerzbank. 

The BoJ then has two options, it can either continue to ignore reality and stick to its optimistic (or unrealistic outlook) or it can face the facts. Its helplessness will remain the same in either case.