Japanese currency fell across the board after the Bank of Japan revealed its policy decision.
After the Bank of Japan (BoJ) announced its policy decision earlier this Tuesday, the Japanese Yen (JPY) comes under severe selling pressure, pushing the USDJPY pair higher for the third day in a row. As expected, the Japanese central bank decided to retain the status quo and voted unanimously to maintain the Yield Curve Control (YCC) policy. This, together with no change in the forward guidance, The underlying positive tone in the equities markets, as well as the underlying bullish tone in the equity markets, turn out to be major factors weighing strongly on the JPY.
The US Dollar (USD), on the other hand, is supported by the fact that a number of Federal Reserve (Fed) officials recently resisted market expectations for early rate reduction in 2024. Nonetheless, geopolitical worries should restrict additional losses for the safe-haven JPY. Traders may also avoid from initiating extreme bullish wagers on the USD/JPY pair ahead of Bank of Japan Governor Kazuo Ueda’s post-meeting news conference, which will be studied for signs of a policy move next year.
Daily Digest Market Movers: The Japanese Yen falls after the Bank of Japan decides to maintain the status quo.
The Bank of Japan resolves to maintain the short-term interest rate objective and the 10-year JGB yield target at -0.1% and 0%, respectively, weighing significantly on the JPY.
According to Reuters, citing two government sources, the Japanese Finance Ministry is considering bringing forward its plan to lower 20-year bonds by JPY200 billion beginning in January.
A number of influential Federal Reserve officials recently attempted to counter bets on early interest rate cuts. Which supports the US Dollar and drives the USDJPY pair higher.
On Monday, Chicago Fed President Austan Goolsbee expressed confusion about the market reaction to last week’s FOMC meeting. And stated that the central bank is not committing to decreasing interest rates soon and fast.
Furthermore, the Cleveland Fed According to President Loretta Mester. Financial markets have gotten a little ahead of the central bank in terms of when to expect interest rate reduction.
Mester’s remarks are consistent with those of two other 2024 voting FOMC members. Who stated on Friday that interest rate decreases were not likely.
Yemen’s Iran-aligned Houthi terrorists have launched a series of drone and ballistic missile assaults on ships in the southern Red Sea.
Yemen’s Iran-aligned Houthi terrorists have launched a series of drone. And ballistic missile assaults on ships in the southern Red Sea. Claiming to be in reprisal to Israel’s assault on Gaza.
US Defense Secretary Lloyd Austin announced the formation of a global coalition. And the commencement of Operation Prosperity Guardian to patrol the Red Sea and counter the threat posed by the Houthi militia.
The ceasefire came to an abrupt conclusion as Israel accused Hamas of violating the agreement. They reached an agreement on who should be released.
Overnight Israeli attacks were reported across the Gaza Strip. Resulting in further Palestinian deaths. Hamas has stated that no discussions will take place until Israel ceases its bombardment of Gaza.
The likelihood of further escalation of geopolitical tensions. In the Middle East spurs some safe-haven flows to the Japanese Yen. Ahead of the Bank of Japan’s critical policy decision.
