The Bank of Japan will maintain interest rates at the current negative 0.1% for the time being, as confirmed in a press conference early on Tuesday morning. Governor Kazuo Ueda announced that when the time comes to increase rates, the central bank would do so in such a way as to “not cause major disruptions to the market with a policy exit”. The comments leave very little room for speculation as to when the rate hike will finally occur, which was perhaps the BoJ’s intention. The next meeting will take place on the 18th of March.
The Yen experienced some measure of volatility over the course of yesterday’s session but ultimately there was no prevailing narrative to drive USDJPY one way or another, finishing the day a relatively meek 0.16% in the black.
Later today, the spotlight will turn to the Bank of Canada, which isn’t expected to make any changes to its interest rate policy either. The ECB’s rate decision follows on Thursday but is once again likely to produce very little in terms of potential time frames. Currency traders will nonetheless pay close attention to the general tone of the central banks’ statements.
Moving on to stocks, the S&P 500 continued to break new ground on Monday and Tuesday, gaining 0.22% and 0.29% over the last two sessions. The Nasdaq Composite has also been unwilling to relinquish its recent gains, instead opting to climb a further 0.32% and 0.43% over the same period. The Dow Jones Industrial Average closed above 38,000 for the first time in history on Monday, before losing a quarter of a percent the following day. You can’t win them all.
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