Tag Archives: Bank of Japan

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...

Overview: The Lunar New Year holiday has shut many centers in Asia until the middle of the week, though China's mainland is on holiday all week. The signaling of a downshift in the pace of Fed tightening by some notable hawks helped lift risk appetites ahead of the weekend and saw the S&P 500 snap a four-day decline. Ahead of the weekend the NASDAQ posted its single biggest advance since last November. The downtrend line drawn of January 2022 highs in the...

Overview: The BOJ defied speculation and stuck to its current policy, which saw the yen sell-off sharply. The dollar rallied about 3.4 yen before falling back. The greenback is broadly lower against the other G10 currencies. However, for the fifth consecutive session, the euro has stalled around $1.0870. While UK headline inflation softened, mostly due to fuel, core prices were unchanged, and this may have helped sterling extend its recent gains to almost $1.2365....

Monday Ranges: Euro: $1.0802-$1.0874JPY/$: JPY127.23-JPY128.87GBP: $1.2172-$1.2289CAD/$: CAD1.3353-CAD1.3418AUD: $0.6941-$0.7019MXN/$: MXN18.7313-MXN18.8566Rumors of an emergency BOJ meeting sent the dollar to its lows in Tokyo, slightly below the pre-weekend low (~JPY127.46). The on-the-run (most current) 10-year yield settled above the 0.50% cap and the generic 10-year bond has not traded below the 0.50% level since January 5. The market is pressing hard,...

Overview: The continued easing of US price pressures has strengthened the market's conviction that the Federal Reserve will further slow the pace of rate hikes and that the terminal rate will be near 5.0%. The decline in US rates has removed a key support for the US dollar, which has fallen against all the G10 currencies this week. The Dollar Index has now retraced half of what it gained since bottoming on January 6, 2021. Meanwhile, there are positive developments...

Overview: After sharp losses yesterday, the US dollar has stabilized today arguably ahead of Fed Chair Powell’s speech at the Riksbank symposium. Yesterday’s Fed speakers stuck to the hawkish rhetoric, and this seemed to help reverse the equity market gains, though the greenback remained soft. If Powell does not push back against the easing of financial conditions, it could very well fan risk-taking appetites and lead to a further easing of financial conditions. Asia...

Overview: The US dollar is consolidating in a mixed fashion today. The FOMC minutes drew much attention but failed, at least initially, to spur a significant shift in expectations. The pricing in the Fed funds futures strip is still consistent with a cut later this year, which the minutes were clear, no officials anticipate. Today's US ADP jobs estimate, and November trade balance are being overshadowed by tomorrow's nonfarm payroll figures. The Fed's Harker,...

The Bank of Japan surprised everyone may lifting the 10-year yield curve cap to 0.50% from 0.25%.The BOJ also said it would increase its bond purchases to JPY9 trillion (~$68 bln) a month compared to the current JPY7.3 trillion.   BOJ Kuroda, whose term ends next April, insisted that the easy monetary policy stance will continue.   The surprise decision sent ripples across the capital markets.  Japanese stocks slumped, with the Nikkei falling about 2.5%.  Global...

Overview:  There have been significant moves in the capital markets this week and participants are turning cautious ahead of the US employment report. After the US equity market rally stalled yesterday, nearly all the Asia Pacific bourses fell today. The strength of the yen (~3.8% this week) has weighed on Japanese equities (Nikkei -1.8% this week) and spurred the BOJ to buy ETFs today for the first time in five months. Europe’s Stoxx 600 is nursing a small loss as...