Asian shares edged higher on Monday as investors waited nervously to see whether the Bank of Japan (BOJ) would defend its super-sized stimulus policy at a pivotal meeting this week, while a holiday in U.S. markets made for thin trading.
EUROSTOXX 50 futures added 0.6%, while FTSE futures put on 0.1%. S&P 500 futures and Nasdaq futures were flat, after a Wall Street bounce last week.
The BOJ's official two-day meeting ends Wednesday and speculation is rife it will make changes to its yield curve control policy given the market has pushed 10-year yields above its new ceiling of 0.5%.The BOJ bought almost 5 trillion yen of bonds on Friday in its largest daily operation on record, yet yields still ended the session up at 0.51%.
"Although domestic demand has started to recover and inflation continues to rise, the economy is not heating up to the extent that a sharp rise in interest rates and potential risk of large yen appreciation can be tolerated," they added. "Thus, we think the economic environment does not strongly support consecutive policy changes."The BOJ's uber-easy policy has acted as a sort of anchor for yields globally, while dragging down on the yen.
Futures now imply almost no chance the Fed will raise rates by half a point in February, with a quarter-point move seen as a 94% probability. "The lower inflation itself encourages a soft landing through real wage gains, by allowing the Fed to more readily pause and encouraging a better behaved bond market, with favourable spillovers to financial conditions," Ruskin said.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Asian shares cautious, BOJ faces crunch policy decisionInvestors waited nervously to see if the Bank of Japan will defend its super-sized stimulus policy at a pivotal meeting this week.
Read more »
BoJ preparing to purchase more Japanese government bonds on MondayThe Bank of Japan again broke its daily record for Japanese government bond purchases Friday as yields defied its 0.5% cap, in a sign of the rising ma
Read more »
BoJ announces JPY 1.4 trillion worth of bond-buying on MondayThe Bank of Japan (BoJ) announced on Monday that it offers to buy JPY 1.4 trillion worth of Japanese Government Bonds (JGBs) unplanned bond purchases
Read more »
Explainer: How does Japan's yield curve control work?The Bank of Japan's yield curve control (YCC) is under fierce market attack, as investors test the bank's commitment to capping bond yields with inflation above the BOJ's target.
Read more »
Yen tests seven-month high ahead of BOJ policy decision; dollar wobblesThe Japanese yen held near an over seven-month peak on Monday, as traders, in the lead up to the Bank of Japan's monetary policy decision this week, ramped up bets that the central bank could make further tweaks to its yield control policy.
Read more »
Japan's sharp wholesale price rise heaps pressure on BOJ's ultra-easy policyJapan's annual wholesale prices rose at a faster-than-expected pace in December, data showed on Monday, adding to recent growing signs of inflationary pressure that could force the central bank to raise interest rates soon.
Read more »