Bank of Japan goes negative

29 January, 2016

There was plenty of speculation in the run to last night’s BOJ meeting that they would ease further and even though only a week ago the BOJ governor Kuroda suggested in Davos that further easing was on the cards, a move to negative rates was not expected. Understandably this caused some wild swings in the yen which weakened with USDJPY moving back above 120 and the Nikkei which strengthened. Other evidence of a weak Japanese economy came earlier in the week in the form of poor trade data and so the pressure has been mounting for the BOJ to further ease monetary policy, but doing this via asset purchases wouldn’t be easy due to their already extensive activity in the JGB market which is rather illiquid now as a result, so cutting rates at this moment in time is the only option open to them and they have even signalled that more is to come.

The risk on move in Asia overnight even saw Chinese stocks rise for the first time in four days and this sentiment is following through to the European session on this final day of the month. The recovery in indices throughout this week has been remarkable and just like last night’s BOJ rate decision, come as quite a surprise when you consider what sentiment was like only one week ago. A strong end to the month this week will make investors feel a lot better about themselves and means the overall losses for the month aren’t going to be anywhere near as bad as they looked like they’d be only a few days ago. Later today data to watch out for is Eurozone CPI, US GDP and then the US Michigan Confidence data.


Source link  
Market Sentiment Hinging On Progress In Brexit

The British parliament will vote on the Brexit agreement today at 18:00 GMT. In theory, this should be a simple vote, with a definite...

Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...


Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...

Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...


Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...

  


Share it on:   or