- Goldman Sachs Predicts 5 Rate Cuts by the Federal Reserve in 2024
- Japan's Ministry of Finance to Reduce 20-Year Government Bonds Supply
- ECB's Kazimir of the National Bank of Slovakia will speak Tuesday
- Goldman Sachs says Red Sea terror threats unlikely to affect oil and LNG prices
- USD/JPY jumped sharply higher - Bank of Japan maintains its policy stance
- Bank of Japan leaves negative rates and YCC 1% ceiling rate unchanged
- China's State Planner approves 144 investment projects worth 1.28 trillion yuan YTD
- BOJ statement imminent: Markets eagerly await comments from Governor Ueda
- PBOC sets USD/ CNY mid-point today at 7.0982 (vs. estimate at 7.1347)
- JP Morgan Forecasts Ether to Outperform Bitcoin in 2024: Protodanksharding boost for ETH
- RBA December minutes: Board considered a 25bp rate vs. on hold
- Bank of Canada Governor Macklem tips rate cuts in 2024, but timing remains uncertain
- New Zealand December Business Confidence 33.2 (prior 30.8)
- Japan's economy minister will attend today's Bank of Japan meeting
- Goldman Sachs on the scooping up of crypto by institutions in 2023
- Bank of Japan policy meeting preview: 2024 could be the game changer
- Russia and Houthi terrorists confluence drive up the price of oil
- UBS on pushback against speculation of a March 2024 FOMC rate cut by senior Fed official
- New Zealand data: November exports and imports rise from October
- Trade ideas thread - Tuesday, 19 December, insightful charts, technical analysis, ideas
- Forexlive Americas FX news wrap: USD/JPY creeps higher ahead of the BOJ
The focal point for the day in Asia was the final Statement from the Bank of Japan for 2023. As was widely expected the Bank left its main policy planks unchanged:
- maintained its short-term interest rate target at -0.1%
- the 10-year JGB yield target was left around 0%, with the 1% upper reference rate ceiling kept unchanged (the previously rigid 1% percent ceiling was made a "reference" point at the October meeting)
- the YCC decision was unanimous
- the Bank made no change to forward guidance
There is more in the bullets above. The immediate impact was a sharp weakening in the yen, with yen crosses all higher. USD/JPY jumped from around 142.60 to 143.40 and then ticked a little higher to just above 143.75.
Still to come is Bank of Japan Governor Ueda’s press conference where his words will be scrutinised for clues on the expected timing of the pivot from the Bank. Speculation has already begun that this could come as early as January although the April meeting is the front-runner for now.
Also on the docket today were the Minutes of the December Reserve Bank of Australia meeting. It appears to me that the Bank is completely lost, with the Board noting that the RBA staff forecast had inflation returning to the top of band by end-2025 rather than the midpoint. Why is this of note? Last week the Australian Treasurer announced that he and the Bank had agreed to target the midpoint of the 2 - 3% band. Prior to this there was a decent potential for the bank to dial back its restrictive policy if it viewed hitting 3% as likely and imminent. Now it'll have to wait until the 2.5 number is in sight. And its not even close. That staff forecast puts the timing to hit 3% by the end of 2025. That's another 2 years away. Goodness knows how far away the new mid-point target is. The bank next meet on February 5 and 6, 2024. On January 31 the next official quarterly CPI will be published and this will inform the February decision; If inflation remains high and sticky the likelihood of another rate hike is high.
AUD/USD rose a little on the day. Apart from USD/JPY the big dollar dipped just a little almost across the majors board.
