Global Markets:
- Asian stock markets: Nikkei up 1.00 %, Shanghai Composite fell 0.05 %, Hang Seng rose 0.35 %, ASX 200 rallied 0.60 %
- Commodities: Gold at $1316 (-0.15 %), Silver at $19.25 (-0.20 %), WTI Oil at $44.85 (+1.80 %), Brent Oil at $46.45 (+1.25 %)
- Rates: US 10 year yield at 1.73, UK 10 year yield at 0.80, German 10 year yield at -0.01
Bank of Japan Rate Decision:
- BOJ: Maintains -0.1 % Negative Interest Rate
- BOJ: To Abandon Monetary Base Target
- BOJ: Decides to Modify Its Policy Framework
- BOJ: Adopts QQE with Yield Curve Control
- BOJ: To Keep Buying JGBs So Balance of Its Holdings Increases at Annual Pace of 80 Trillion Yen
- BOJ: Introduces New Market Ops for Yield Curve Control
- BOJ: To Buy JGBs So 10 Year Yield Hovers Around 0 %
- BOJ: Scraps Range for Duration of JGBs That BoJ Buys
- BOJ: Max Amount of Each ETF Purchase Will Take into Account Total Market Value of ETF, And Coverage of Index ETF Tracks
- BOJ: Can Cut Short Term Policy Rate, Target Level of Long Term Rates in Future Easing
- BOJ: May Accelerate Expansion of Monetary Base as Future Policy Option
- BOJ: To Continue Expanding Monetary Base Until CPI Exceeds 2 % And Stays Above Target in Stable Manner
- BOJ: To Make Yield Curve Control a Centrepiece of Its New Policy Framework
- BOJ: Decision On Yield Curve Control Was Made by 7-2 Vote
- BOJ: Decision On New JGB Market Ops Made by 8-1 Vote
News & Data:
- Japan Trade Balance (Aug): JPY -18.1 Bln (est JPY 191.0 Bln rev prev JPY 513.6 Bln)
- Japan Exports (YoY) Aug: -9.6% (est -4.7% prev -14.0%)
- Japan Imports (YoY) Aug: -17.3% (est -16.6% prev -24.7%)
- Australia Skilled Vacancies (MoM) Aug: -0.4% (prev -0.6%)
- South Korea PPI (YoY) Aug: -1.7% (rev prev -2.5%)
- South Korea PPI (MoM) Aug: 0.1% (prev -0.1%)
- PBoC Fixes Yuan at 6.6738 (prev 6.6595)
Markets Update:
USD/JPY rallied after the BoJ announced new measures to achieve its 2 % inflation goal. While the central bank refrained from cutting rates and increasing the size of its QE programme, it added a yield curve control to its policy framework. The BoJ's goal is to keep the 10-year yield around 0 %.
USD/JPY rose from 101.40 to 102.60 after the announcement. AUD/JPY rallied from 76.60 to 77.40, while EUR/JPY made it from 113.00 to 114.20 and GBP/JPY from 131.50 to 133.00.
The Dollar caught a bid after the BoJ and strengthened against all other major currencies. EUR/USD fell from 1.1150 to 1.1125, while GBP/USD declined from 1.30 to 1.2940.
Upcoming Events:
- 07:30 BST – Bank of Japan Press Conference
- 15:30 BST – US Crude Oil Inventories
- 19:00 BST – Fed Rate Decision
- 19:00 BST – FOMC Statement
- 19:30 BST – Fed Chair Yellen speaks
- 22:00 BST – RBNZ Rate Decision
