The Bank of Japan scrapes the ceiling for buying corporate bonds. But the BoJ was not buying anywhere close to the limit because, under the YCC framework, they have not needed to. They have not been bumping against any quantitative limits.
Furthermore, bond buying and QE-type announcements have had zero impact on currencies around the world, including the U.S., Canada and Australia. New Zealand is open to outright monetization, and NZD doesn’t react.
On a positive note, the Nikkei is holding onto its 2.5% gain since the open and the S&P 500 Futures touch 2850 which supports the markets' thematic risk-on sentiment view. Central Banks, signaling a willingness to expand existing asset-purchase schemes, could support risk assets.
Of the major central banks, the BoJ has the least scope to expand policy, given the constraints around where JGB yields are already trading. That leaves USD/JPY downside attractive, especially if the Fed pulls another policy rabbit out of the hat.
Asia’s equity markets are starting the week on a firm footing. In FX, more positive risk sentiment is translating into a weaker USD, with AUD and KRW leading the charge.
Front-month WTI is an outlier, however, falling $-1.25 in thin trade this morning. Weaker oil prices have been a feature of recent Mondays, but this is very much a front-month WTI idiosyncrasy.
Prices further along the futures curve are better supported, while December is down only -.47 Cents
For now, rapidly-filling oil storage is being interpreted as a US-specific issue, which explains why even the oil-sensitive AUD and MXN are rallying at this point.