Bank of Japan Governor Ueda spoke on Monday, to business people in Nagoya. Ueda made extensive comments without giving too much away on a potential rate hike at the Bank’s next meeting on December 18 and 19. Ueda said that the Bank will continue to raise its policy rate and adjust its degree of monetary support if the economy and prices move in line with its forecasts. That is, data dependency. In his further comments, though, Ueda referred to continuing wage rises and that the driver of Japan's inflation shifting away from cost-push factors towards rise in domestic wages. This emphasis seems to me to indicate he views conditions lining up for ongoing hikes rather than not.

The yen reaction was an immediate decline, with USD/JPY popping above 155.00, albeit not for too long. As I post its back around the middle of the session range circa 154.55.

Prior to Ueda were data on core machinery orders out of Japan. These showed a disappointing miss.

Gold was a decent mover on the day, jumping above US$2595 at one stage. Finding a smoking gun catalyst has been elusive, with much commentary around the ongong escalation in Ukraine:

  • Russia escalated with its influx of troops from North Korea
  • And now the US authorization of the use of long-range weapons to hit targets inside of Russia

There was some speculation of Chinese buying (PBoC) returning to market.

From China today we saw moves from Shanghai to support its local property market (see bullets above).

Chinese equities are positive on the day. US equity index futures (ES and NQ) are higher,

gold wrap chart 18 November 2024 2