Headlines:
Market update:
The main event today was the BOJ policy decision, and the Japanese central bank delivered a 25 bps rate hike as expected by markets. That brought the policy rate to 1.25%, its highest in 31 years.
While the BOJ did signal that it will stay on course to tighten policy further, there was nothing in the language to suggest a quicker pace than before. BOJ governor Ueda's press conference also fell short in that regard. And that disappointed markets alongside the two dovish dissents from prime minister Takaichi's appointed board members.
USD/JPY moved up initially in Asia to 157.10 before falling back to 156.60 during Ueda's press conference but then raced higher to test the 158.00 level afterwards.
Looking to broader markets, investors are still continuing to digest the Fed decision from this week for the most part. Oil prices have eased back on reduced worries about Middle East supply disruptions but that is being balanced out by a bond market that is still keeping things on edge.
Brent crude is down another 1.3% today to $103.37 but is still holding well above $100, while 10-year Treasury yields continue to rest just below the 5% level at around 4.96% today.
While that brought some relief yesterday, European stocks are starting to get nervous again in continuing their early week fall. US futures are also little changed now after seeing early gains pared, setting up for a tense open later in the final stretch of the week.
Broader markets can at least take some comfort from the fact that the bond market did not unravel following the Fed decision this week. Warsh managed to deliver the expected rate hike while keeping the longer end relatively contained, even if investors are still uneasy about where rates go next.
But so long as oil prices and bond yields continue to threaten higher levels, it will be tough for investors to seek any lasting relief once the calmer mood begins to dissipate.
This article was written by Justin Low at investinglive.com.
Source: Investing Live - News
