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Asian markets down on North Korea, Japan rises on BoJ easing

FXstreet.com (Barcelona) - As promised, the BoJ changed to a new monetary policy framework, now targeting the monetary base rather than the overnight call rate. Surpassing market consensus of 10y point, Rinban operations and the JGB component of the Asset Purchase Program were folded into a new purchasing program with the authority to buy all along the JGB curve - even out to the 40y point. The BoJ expects its total holdings of JGBs to rise to Y140 trn by end-2013, Y26trn more than the previous guidance. JGB holdings are now forecast to rise a further Y50 trn during 2014. Japan’s Nikkei Stock Average rose by +1.33%.

However, not only the US ISM non-manufacturing and ADP employment disappointed, but North Korea approved a nuclear attack against the US, threatening to take action right away. South Korea’s Kospi is down by -1.20%, Mainland China’s Shanghai Composite fell -0.11% and Hong Kong’s Hang Seng eased -0.14%.

Futures for the German DAX 30 (+0.29%) and the French CAC 40 (+0.40%) are signaling a higher opening ahead of the European session and the ECB policy meeting. The BoE is also having its policy checked out.

Forex: GBP/USD hovering over 1.5100

The sterling is extending its decline from yesterday’s highs in the boundaries of 1.5160 to the current area below the key support of 1.5100, ahead of UK services PMI and the BoE MPC gathering...
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Forex: USD/JPY with violent jumps, now above 95.00

Despite the announcement of a new monetary policy framework and more easing than expected from the BoJ, the USD/JPY took its time to switch from a numb state just below 93.00 to jump above the 94.00 handle. After a few moments, the pair went for another leap, this time to 95.44, but noticeably retraced back. Markets are positioning themselves to this surprise action.
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