The Bank of Japan unexpectedly raised its benchmark interest rate to 0.25% this morning.
➡️ The Bank of Japan held a much-anticipated monetary policy meeting a few hours ago. Although a rate hike was considered a real possibility by analysts, the Bank was expected to keep its benchmark rate at 0.10%, but in fact increased it by 0.15% to 0.25%, the highest level since 2008. The Bank also announced that the pace of bond purchases will be halved over a period of 2 years. That's a hawkish bias, and it's pushed the Japanese yen even higher against most currencies after more than a week of already strong gains. It also boosted major Asian stock indexes, with the Nikkei 225 And the HSI both up above 1.5% today, and this has also led other major global stock indices higher.
➡️ Australian CPI (inflation) data came in as previously expected, showing an annualised rate of 3.8%. However, the trimmed mean of the CPI was slightly lower than expected, with a quarterly rate of 0.8%. The Australian dollar is down today, but this is likely due to other factors rather than the CPI data, although the data may have helped push the Aussie lower.
➡️ The US Federal Reserve will hold a policy meeting later today, where it is expected to hold rates but will firmly hint at a cut at its next meeting in September and nod to easing inflationary pressure in its statement. U.S. Treasury yields are very close to multi-month lows and will have attracted short trades from trend traders.
➡️ In the Forex market, since the opening of Tokyo today, the New Zealand dollar has been the strongest major currency, while the Australian dollar has been the weakest. The Japanese yen is also strong after the Bank of Japan raised rates earlier.
➡️ It seems that Bitcoin found some support previously, around the round figure of $66,000.
➡️ They continued to rise, recovering about half of its recent loss since hitting an all-time high earlier this month.
Credit by DailyForex.com
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