The BOJ decision was probably not enough. USD/JPY is still above 160, which will disappoint Japanese policymakers, but we're not moving into new highs so that's a relief. The deputy governor's statements had hawkish lines and confidence about the Japanese economy outlook, which is significant, but probably not enough. The market wants to see evidence the BOJ is not behind the curve on inflation. The BOJ can probably hike again in December, but there's no confidence they will hasten the pace.

There's still uncertainty about oil supply from the Middle East, which could be a significant question mark for activity later this year. The deputy governor gave reassurances that the economy is performing well and real interest rates are still very soft, but jumping the gun on signaling faster hikes given the uncertainties would be premature.

The BOJ doesn't target the currency, but a weak currency imports inflation so it's an input they consider. The Ministry of Finance decides on intervention and is more political - there could be friction with the US Treasury if USD/JPY continues to rise. The market is nervous about pushing USD/JPY higher from these levels, but if the BOJ doesn't keep indicating an aim to increase rates, speculators could still see upside potential.

For Warsh's first FOMC, the crucial indicator is whether he will be politically motivated to find ways to give the Fed a more dovish framework. Another uncertainty is which inflation indicator he will watch - if he prefers trimmed mean measures, he could become more dovish because they're moving lower relative to PCE. He doesn't want the Fed to talk so much and doesn't enjoy forward guidance, so we can expect less from him.

The two-year yield at 4.05% pricing in 15bp of hikes by year-end may not materialize because of potential political motivation leaning on Warsh. That depends on economic data, particularly labor market data. Whether he sets in motion a framework leaning on other inflation indicators to push the Fed dovish will be crucial.