(Bloomberg) — The yen weakened after the Bank of Japan ended the world's last negative interest rate policy and stressed that financial conditions would remain easy.
Most read by Bloomberg
The BOJ's first rate hike in 17 years had been widely expected, and Governor Kazuo Ueda struck a neutral tone at a news conference, saying there was still a chance his inflation target would not be met. While the central bank abandoned its yield curve control program, it also pledged to continue buying long-term government bonds.
Japanese bonds rose and the Topix closed at its highest level since 1990. The yen fell 0.8% against the dollar to 150.35. In a week full of central bank decisions, attention now turns to Wednesday's Federal Reserve meeting.
“A well-known decision by the BOJ helped avoid turmoil in financial markets and reflects the power of strong communication,” said Charu Chanana, strategist at Saxo Capital Markets.
The dollar strengthened and government bonds barely changed. European stocks were flat and U.S. contracts pointed to small moves on Wall Street after Monday's tech-fueled rally.
Investors will focus on the Federal Reserve's forecasts – the dot plot – to gauge how many interest rate cuts policymakers expect this year.
“Financial markets were overconfident in December about the pace of interest rate cuts,” said Anders Faergemann, managing director/senior portfolio manager at Pinebridge Investments Europe Ltd. “Now it feels like Powell has begun a gradual move toward some sort of rate normalization.”
Elsewhere, the Australian dollar fell for a fourth day and the country's stocks rose after the Reserve Bank of Australia kept interest rates at a 12-year high.
The story goes on
Company highlights:
-
Unilever Plc plans to separate its ice cream business, which includes brands such as Ben & Jerry's, as Chief Executive Hein Schumacher streamlines the British consumer goods group by cutting 7,500 jobs.
-
AstraZeneca Plc has agreed to buy Fusion Pharmaceuticals Inc. for up to $2.4 billion in a bid to transform cancer treatment by replacing traditional methods such as chemotherapy with more targeted approaches.
-
Thyssenkrupp AG and private equity firm Carlyle Group Inc. are in talks that could lead to a partial sale of the steelmaker's naval shipbuilding division.
-
Airbus SE has abandoned talks to buy Atos SE's big data and cybersecurity business, leaving the troubled French IT company with fewer options to cut debt.
-
Nvidia Corp. unveiled a new processor design called Blackwell that can process the models underlying AI many times faster, the company said at its GTC conference in San Jose, California.
Important events this week:
-
Germany ZEW survey expectations, Tuesday
-
European Central Bank Vice President Luis de Guindos speaks on Tuesday
-
US housing construction begins on Tuesday
-
Eurozone consumer confidence, Wednesday
-
Fed interest rate decision; Chairman Jerome Powell holds a press conference on Wednesday
-
Reddit's IPO, Wednesday
-
Christine Lagarde from the ECB speaks on Wednesday
-
Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Thursday
-
Bank of England interest rate decision, Thursday
-
US Conference Board leading index, existing home sales, initial jobless claims, Thursday
-
Nike, FedEx earnings, Thursday
-
Japan CPI, Friday
-
Germany IFO business climate, Friday
-
Atlanta Fed President Raphael Bostic speaks Friday
-
Robert Holzmann and Philip Lane from the ECB will speak on Friday
Some of the key moves in the markets:
Shares
-
The Stoxx Europe 600 was little changed at 8:56 a.m. London time
-
S&P 500 futures were little changed
-
Nasdaq 100 futures were little changed
-
The futures on the Dow Jones Industrial Average hardly changed
-
The MSCI Asia Pacific Index fell 0.5%
-
The MSCI Emerging Markets Index fell 0.9%
Currencies
-
The Bloomberg Dollar Spot Index rose 0.3%
-
The euro fell 0.2% to $1.0846
-
The Japanese yen fell 0.8% to 150.33 per dollar
-
The offshore yuan was little changed at 7.2101 per dollar
-
The British pound fell 0.3% to $1.2692
Cryptocurrencies
-
Bitcoin fell 6.1% to $63,270
-
Ether fell 7.8% to $3,234.4
Tie up
-
The yield on 10-year government bonds remained little changed at 4.32%
-
The yield on 10-year German government bonds fell by one basis point to 2.45%
-
The 10-year UK government bond yield fell two basis points to 4.07%
raw materials
-
Brent crude fell 0.3% to $86.59 a barrel
-
Spot gold fell 0.3% to $2,153.11 an ounce
This story was produced with support from Bloomberg Automation.
– With assistance from Brett Miller, Winnie Hsu and Tassia Sipahutar.
Most read by Bloomberg Businessweek
©2024 Bloomberg LP
Comments are closed.