Bank of Japan '"Shock And Awe' Post-Mortem From Goldman And SocGen"

In the last two trading sessions Tokyo has regained everything it has lost in the prior two weeks plus 1%, equivalent to a 724 point move on the DJIA. That would probably rate a headline in the U.S. newspapers.
From ZeroHedge:

First, from Goldman's Themistoklis Fiotakis
Bank of Japan Delivers; Dollar is Bid Across the Board in Response

Earlier this morning the BoJ introduced a comprehensive change to its monetary policy framework. The asset purchasing program will be merged with the outright JGB purchase program (rinban), and JGB purchases will be expanded to include all maturities, including 40-year bonds. The pace of JGB purchases by the BoJ will be accelerated to ¥7trn per month from just under ¥4trn currently (on a gross basis), and purchases of ETFs and J-REITs will also be increased. The main operating target for money market operations was changed to a monetary base control (a quantitative index) from the uncollateralized overnight call rate.

The size and speed of these measures were a dovish surprise to markets. The Yen has weakened against a number of currencies; indicatively $/JPY moved from 92.9 to 95.4. The JPY is returning to levels prevailing in the weeks before the market started to reflect concerns about a potential BoJ disappointment. Given the dovish surprise vis a vis initial expectations, the risks are for a $/JPY move higher in the near term.

Interestingly, the move in the Yen has also benefited the Dollar more broadly, with DXY moving up 0.7% this morning. The Dollar move combined with market expectations of a dovish ECB led the EUR down to 1.2792 this morning (from 1.2850).

The Nikkei closed up over 2% despite falling around 1% earlier in the session. Long-term Japanese rates declined, with the 10-year rate falling by around 10bp. The largest impact, however, was at the long end of the curve, with the 30-year yield down 22bp. The flattening of the curve is in line with our fixed income views and has benefited our trade recommendation for a 10s20s JGB flattener; we initiated our recommendation last Thursday at a level of 92bp and it is currently at 77bp, 12bp away from the target of 65....MORE

The Nikkei 225 closed at 12,634.54, still 3% or so from the first target, 13,000.
I'm getting too old for this stuff.