Bank of Japan Maintains Status Quo, Core Inflation Forecasts Trimmed

The Bank of Japan at its January monetary policy meeting maintained existing policy as widely expected. The BoJ kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield unanimously. Previously the BoJ adjusted the settings by shifting the hard ceiling from 0.50% to 1.00% in the yield curve control band of +/- 0.50%. No change to core-core inflation forecasts, but core inflation forecasts were trimmed. Bank of Japan Governor Ueda’s press conference dis … Continue reading “Bank of Japan Maintains Status Quo, Core Inflation Forecasts Trimmed”

Iron Ore Prices Retrace 12% from Two Year Highs, Dragging Aussie Dollar Down

Iron ore prices have fallen over 12% from a two year high earlier this month over $US145 a tonne to $US127.5 on Tuesday. Prices had risen on expectations of healthy iron ore demand for winter restocking amongst growing optimism that Beijing’s latest round of stimulus to revive China’s troubled property market. China has continued to struggle; shipping has been impacted by the Red Sea attacks as a result commodity prices including iron ore have sold off. Commodity price sensitivity is … Continue reading “Iron Ore Prices Retrace 12% from Two Year Highs, Dragging Aussie Dollar Down”

Bank of Japan Governor Kazuo Ueda Leaves Options Open, Will Give No Preemptive Warnings

Bank of Japan Governor Kazuo Ueda was stoic in declaring the BOJ is to keep its options open at the follow up press briefing after the central bank’s two-day meeting. Perhaps in deference to the Fed and ECB telegraphing intentions he added that policymakers were unlikely to give an explicit warning of an impending rate hike. “There isn’t much likelihood of us suddenly announcing that we’ll raise rates a month in advance,” Ueda said. Earlier the Bank of Japan maintained … Continue reading “Bank of Japan Governor Kazuo Ueda Leaves Options Open, Will Give No Preemptive Warnings”

Bank of Japan Maintains Stance Leaves Negative Rates and YCC 1% Ceiling Rate Unchanged

The Bank of Japan at its December monetary policy meeting maintained existing policy as widely expected. The BoJ kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield unanimously. Previously the BoJ adjusted the settings by shifting the hard ceiling from 0.50% to 1.00% in the yield curve control band of +/- 0.50%. The yen weakened, a move higher for yen crosses. Japan’s currency fell as much as 1.3% to a one-week low … Continue reading “Bank of Japan Maintains Stance Leaves Negative Rates and YCC 1% Ceiling Rate Unchanged”

Yen Rallies After Japan’s 10-year Government Bond Yield Surges on BOJ’s Ueda Comments

Bank of Japan rate hike speculation fueled big moves in Japanese Government Bonds and the Japanese Yen this morning, the Nikkei Dow also fell 1.8% through the turmoil. Japan’s 10-year government bond yield surged above 0.75%, rebounding sharply from over three-month lows. The yen appreciated from about 147.3 to 144.7 USDJPY for a 1¾% gain. JGBs bear steepened with the 2s yield up about 4bps and 10s climbing 11bps. Bank of Japan Governor Kazuo Ueda before Parliament testified ambiguous guidance … Continue reading “Yen Rallies After Japan’s 10-year Government Bond Yield Surges on BOJ’s Ueda Comments”

Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades

Rating agency Moody’s lowered its outlook on the US credit rating to “negative” from “stable”, pointing to a sharp rise in debt servicing costs with higher interest rates and “entrenched political polarization”. The move came after US markets had closed for the weekend. The move followed Fitch and S&P downgraded the US. The credit ratings agency maintained the USA’s top Aaa rating but changed its outlook to ‘negative’. Moody’s is the only of the three big credit rating agencies that … Continue reading “Moody’s Lowers Outlook on US Debt to Negative, Towards Fitch and S&P Global Downgrades”

Yen Falls After Bank of Japan Changes Language Around 1% 10yr JGB Cap BUT No 1.5% Extension

The Bank of Japan as widely expected kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield unanimously. The BOJ did not extend the cap to 1.5% as speculated earlier but instead formalized the 1% cap. Previously the BoJ adjusted the settings by shifting the hard ceiling from 0.50% to 1.00% in the yield curve control band of +/- 0.50%. The yen weakened, move higher for yen crosses. The yen fell to fresh … Continue reading “Yen Falls After Bank of Japan Changes Language Around 1% 10yr JGB Cap BUT No 1.5% Extension”

Yen Falls Further After Bank of Japan No Change to Monetary Policy or Forward Guidance

The Bank of Japan as widely expected kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield unanimously. Previously the BoJ adjusted the settings by shifting the hard ceiling from 0.50% to 1.00% in the yield curve control band of +/- 0.50%. The yen weakened, move higher for yen crosses. USD/JPY moved to fresh highs of 148.38 after Governor Ueda press conference where he said “I said that we need to patiently continue … Continue reading “Yen Falls Further After Bank of Japan No Change to Monetary Policy or Forward Guidance”

Forex Traders Weekly Outlook – The Aussie Bounces with Oil, Copper and Iron Ore

The Australian Dollar was the best performer of the week, buoyed by improving sentiment in commodities, iron ore hit a five-week high and oil prices YTD highs with hopes for a Chinese economy rebound. The New Zealand Dollar pulled along with it. The US dollar rally was tested this week and ultimately again benefiting from safe haven and yield chasing flows proved its resilience after rebuffing earlier selling. The Dollar Index bounced off 102.84 to close the week at 104.23. … Continue reading “Forex Traders Weekly Outlook – The Aussie Bounces with Oil, Copper and Iron Ore”

Forex Traders Weekly Outlook – US Dollar and Swiss Franc Attracting Safe Haven Flows

The US dollar rally continued again this week benefiting from safe haven and yield chasing flows. 10-year Treasury yields underpinning yen pairs with carry trade impact. Fed Chair Jerome Powell’s remarks at Jackson Hole renewed commitment to combating inflation prompted traders to elevate their expectations for another rate hike within the year. The yen fell to ¥146.6 per dollar after Jay Powell’s speech at one point. That was the lowest level against the dollar since November on Friday, pressuring the … Continue reading “Forex Traders Weekly Outlook – US Dollar and Swiss Franc Attracting Safe Haven Flows”