The Japanese Yen is sent soaring higher on its best day since 1998, as the Bank of Japan’s raising of its 10-year yield cap is interpreted as a harbinger of a tighter monetary policy to be implemented in 2023.
- The Japanese Yen gained very strongly yesterday, with the currency having its day of largest gains since 1998. The USD/JPY currency pair fell very strongly to reach a new 4-month low at ¥130.57. The Yen rose most strongly against the Australian and New Zealand Dollars. The Yen now seems to be stabilizing, and it is unclear whether it will make further gains today. The Yen’s rise has been triggered by a policy shift from the Bank of Japan, which yesterday announced a new bond purchasing program, and the raising of its 10-year treasury yield cap to 0.50%. Many analysts take this as a signal that a more hawkish monetary policy shift can be expected in 2023, following a change to the inflation target policy. The Japanese 2-year treasury yield rose above zero yesterday for the first time since 2015.
- Precious metals gained strongly yesterday, especially Silver which reached a new 6-month high above $24.30. Silver and Gold are in strong, long-term bullish trends, and are more likely than not to see higher prices over the coming days.
- In the Forex market, the strongest major currency is the Australian Dollar, while the weakest major currency is the New Zealand Dollar. However, this situation is likely not to last for much longer.
- There will be a release of Canadian CPI (inflation) data today. It is expected that the month-on-month increase will fall to zero this month after reaching 0.7% last month.
- There will be a release of US CB Consumer Confidence data today.
- 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 658.93 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, China, Guatemala, Japan, Mongolia, and New Zealand. There is concern that the spread in China is currently extremely strong, which could have an economic impact and disrupt supply chains.