Tag Archives: Bank of Japan

Overview: The dollar was bought after yesterday's pullback spurred by Japanese and Chinese comments and the tighter capital controls from Beijing requiring permission to buy more than $50 mln. The economic and monetary policy divergence continues to underpin the greenback. It is firmer against all the G10 currencies and is mostly inside yesterday's ranges. Most emerging market currencies are lower, led by central European currencies. The Chinese yuan is steady....

Overview: The UK surprised with higher-than-expected consumer inflation and budget deficit, and the odds of a 50 bp hike tomorrow edged higher. Sterling has been sold on the news and is the weakest of the G10 currencies, off about 0.5%. The dollar is mixed with the euro, Swedish krona, Canadian dollar, and Swiss franc posting small gains. Emerging market currencies are lower, including the Chinese yuan, which is at new lows since last November. The Mexican peso,...

 Overview: Yesterday's dollar surge has stalled. It is consolidating its gains and is softer against all the G10 currencies. After popping above JPY140 yesterday, there were no follow-through greenback buying in Tokyo. Most emerging market currencies are also firmer, including the South African rand, which plummeted by 2.8% yesterday on the back of the central bank's warning of downside currency risks as it delivered a 50 bp hike. The Chinese yuan is also firmer to...

Overview:  The market took a dovish message away from the Bank of Japan and sent the dollar above JPY136, its best level since March 10 and spurred a sharp rally in JGBs. Japanese equities led the rally among the Asia Pacific markets. Europe has not been able to follow suit. It disappointed with Q1 GDP (0.1% rather than 0.2%). The Stoxx 600 is of about 0.3%, leaving it off about 1.3% this week, its first weekly loss since the middle of March. US equity futures are...

Overview:  Rising rates and falling stocks provided the backdrop for the foreign exchange market this week. The dollar appreciated against all the G10 currencies but the Swedish krona, which is still correcting higher after the hawkish pivot by the central bank. The market looks for a later and higher peak in the Fed funds rate. This coupled with the risk-off sentiment helped the dollar extend its recovery after falling since last September-October. The yen's...

Overview:  A series of strong US high-frequency data points after a poor finish to last year has spurred a dramatic shift in market expectations. And talk among a couple of (non-voting) FOMC members of a 50 bp hike has provided added fodder. The greenback is extending its recovery today against all the major currencies, with the Australian and New Zealand dollars hit the hardest. Emerging market currencies have also been knocked back. This is part of a larger risk...

Overview: A consolidative tone is mostly the theme of the day. The revisions to the US CPI announced before the weekend add to the uncertainty and focus on tomorrow’s report. At the same time, investors watch ongoing air space activity that has led to a few objects being shot down over the US and Canadian airspace. Yet the fear of escalation seems too mild still, but China’s ability to secure a rapprochement and leave its “wolf diplomacy” behind is strained, even as...

(I am on a business trip and did not intend to post any analysis today. However, there have been a number of unexpected developments that warrant some commentary. Thanks for bearing with me.) Japanese press reports that the BOJ Deputy Governor Amamiya turned down the opportunity to become the next BOJ governor. Instead, next week, former BOJ board member Kazuo Ueda will be nominated. The market reacted dramatically, taking the yen sharply higher and sold JGBS....

Overview: The capital markets have shrugged off the more than 1% loss of the Nasdaq and S&P 500 yesterday and have jumped back into risk assets. The stocks and bonds have been bought and the dollar sold. Chinese and Hong Kong shares gained more than 1% today. Japan was mixed and Taiwan and South Korean equites saw minor losses. Europe's Stoxx 600 is up over 1%. Nasdaq futures are up nearly 1.2% while the S&P 500 is lagging slightly. European bonds yields are...

Overview: The honeymoon for risk assets that began the year ended with a bang at the end of last week with the monster US jobs report and the rebound in the service ISM. Disappointing news from several large US tech companies provided extra encouragement. The yen's weakness helped Japanese stocks today, but the other larger bourses in the Asia Pacific area were sold, with losses in Hong Kong, the CSI 300, South Korea, and Taiwan off more than 1%. Europe's Stoxx 600...