Well contrary to what most economists expected from the BOJ, instead of a shock and awe to arrest Japan's continual deflation and weak economy, the BOJ today fires a pea shot that initially pushed the Yen lower vs the US$ and the Nikkei up more than 300 points, but as the day wears on, economists are less than impressed with the BOJ's action.
Perhaps the BOJ is still in a fantasy land believing that they could still target an inflation that is more than 2%. But one thing is clear their balance sheet will continue to expand as the BOJ signals it will increase ETFs purchases. Looks like the Japanese companies are being nationalised.
After tumbling by more than US$4 per oz after the the BOJ's announcement, gold rebounded to more than US$9 per oz at the time of writing. The Yen to has gained vs the US$.
Should the Fed decides not to raise interest rate today, the US$ will fall and Yen would gain further as well. This could cause the Nikkei to tank to morrow morning.
All arguments are against the Fed raising interest rate as the economic data that comes in in the last few weeks have been bad.
Still, it will be interesting to see what excuse the Fed will use this time in not hiking the interest rate after all the jawboning in the month of August.
If the Fed does hike, then the stock market will sell off, including miners, as an initial reaction, and money will move into gold, which the miners will then recover very fast. Pretty much like what happened in December 2015.
A hike will likely push the US economy into recession.
The above is entirely my opinion.
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