- Governor Kuroda of the Bank of Japan earlier announced that the Bank will be amending its yield cap by allowing 10-year bond yields to rise to 0.50%, up from the current limit of 0.25%, approved by unanimous vote. The Bank also committed to massive purchases of Government bonds and other debt instruments while leaving its rate unchanged at -0.10%.
- The policy action by the Bank of Japan has strongly boosted the Yen, with the USD/JPY currency pair falling to reach a new 4-month low price at ¥133.36 and the Yen gaining against every major currency. Asian equity markets have fallen strongly, with both the HSI and the Nikkei 225 Index down by more than 2% on the day. There is a general atmosphere of risk-off sentiment and fear of impending recession.
- The release of recent meeting minutes from the Reserve Bank of Australia showed that the RBA last month considered not hiking its interest rate for the first time in 8 months, although it was decided to proceed with the hike as the Bank felt it was so far from bringing inflation down towards its 2% / 3% target level. Analysts see this as increasing the likelihood that the RBA will now pause hiking rates, but analysts still expect two 0.25% hikes in 2023. The release of the minutes help push the Australian Dollar firmly lower, with the AUD/USD currency pair reaching $0.6630.
- In the Forex market, the strongest major currency is the Japanese Yen, while the weakest major currency is the Australian Dollar.
- Daily new global coronavirus cases rose last week for the fifth consecutive week.
- It is estimated that 68.7% of the world’s population has received at least one dose of a coronavirus vaccination.
- Total confirmed new coronavirus cases worldwide stand at over 658.3 million with an average case fatality rate of 1.01%.
- The rate of new coronavirus infections appears to now be significantly increasing only in Brazil, Guatemala, Honduras, Japan, Mongolia, and New Zealand.