The JPY is the strongest and the CHF is the weakest as the North American session begins | Forexlive

The JPY is the strongest and the CHF is the weakest as the North American session begins

Bank of Japan’s Ueda spoke and the JPY soared as markets and to speed and shift and 2024 of DOJ policy. Some of the themes gleaned from the headlines are outlined below:

• Current Economic Support: Ueda highlights that Japan’s economy is currently being supported by accommodative financial conditions and economic stimulus measures. This support is expected to continue, helping the economy to recover moderately.

• High Uncertainty: He acknowledges that there is extremely high uncertainty surrounding Japan’s economy, emphasizing the need for close monitoring of the impact of financial and foreign exchange markets.

• Monetary Policy Stance: The BOJ plans to continue its monetary easing policy under Yield Curve Control (YCC) to support economic activity and encourage a cycle of wage growth. However, Ueda notes that Japan has not yet reached a point where it can achieve its price target (presumably the 2% inflation target) sustainably, stably, and with sufficient certainty.

• Challenges Ahead in 2024: Ueda predicts that Japan will face even more challenging economic conditions in 2024.

• Uncertainty on Interest Rate Policy: The BOJ has not yet decided which interest rate to target after ending its negative interest rate policy. Options include raising the rate applied to financial institutions’ reserves or reverting to a policy targeting the overnight call rate. The specifics of rate increases and the pace of short-term rate hikes post-negative rate policy are dependent on economic and financial developments.

• Criteria for Achieving Inflation Target: Ueda defines achieving 2% trend inflation as a state where, absent new shocks, the economy can sustain inflation around 2% with wage growth slightly above this level.

• Difficult Decisions Ahead: As the exit from stimulus approaches, Ueda acknowledges the difficulty in choosing which monetary policy tools to mobilize.

• Collaboration with Government: The BOJ intends to work closely with the government while monitoring currency and financial market movements.

• Current Economic Trends: There is a moderate increase in service spending, and a crucial factor moving forward is for wages to continue rising to support consumption.

The market will be focusing on the US initial claims data this morning. The expectations are for for 221K vs 218K last week. Also on the schedule today is the Canadian building permits (1.1% vs -6.5% last month). At 10 AM the final US Wholesale inventories are expected to remain at -0.2%.

A snapshot of the markets to kickstart the North American session shows:

• Crude oil is trading up $0.40 or 0.56% at $69.80 . At this time yesterday, the price was at $71.73
• Spot gold is trading up $6.89 or 0.34% at $2032.15 . At this time yesterday, the price is at $2026.23
• Spot silver is trading unchanged at $23.89 . At this time yesterday, the price was at $24.12
• Bitcoin is trading at $43,292. At this time yesterday, the price was way down at $44,080

In the US stock market, the major indices are implying a mixed opening after closing lower across-the-board yesterday. Each of the major indices gave up earlier gains yesterday to end the day lower

• Dow Industrial Average futures are implying a loss of -34 points . Yesterday the Dow Industrial Average fell -70.13 points or -0.19%
• S&P index futures are implying a gain of 4.4 points. Yesterday the S&P index fell -17.82 points or -0.39%
• NASDAQ index futures are implying a gain of 50 points. Yesterday the Nasdaq Index fell -83.21 points or -0.58%

In the European equity markets, the major indices are trading lower. German DAX comes off record levels.

• German DAX, -0.24%. Yesterday the German DAX rose 0.75% and closed at a record high of 16656.45
• France’s CAC, -0.20%. Yesterday France CAC rose 0.66%.
• UK’s FTSE 100, -0.06% . Yesterday UK’s FTSE 100 rose 0.34%
• Spain’s Ibex, -1.25%. Yesterday Spain’s Ibex rose 0.19%
• Italy’s FTSE MIB, -0.41% (10 minute delay). Yesterday Italy’s FTSE MIB rose 0.81%

In the Asia Pacific market major indices were lower:

• Japan’s Nikkei index,-1.76%
• China’s Shanghai Composite Index, -0.09%
• Hong Kong’s Hang Seng index, -0.71%
• Australia’s S&P/ASX index, -0.07%

In the US debt market, yields are trading higher/lower :

• US 2Y T-NOTE: 4.617%, +1.4 basis points. At this time yesterday, the yield was at 4.609%
• US 5Y T-NOTE: 4.152%% +2.9 basis points. At this time yesterday, the yield was at 4.173%
• US 10Y T-NOTE: 4.192% +3.6 basis points. At this time yesterday, the yield was at 4.195%
• US 30Y BOND: 4.262% +3.8 basis points. At this time yesterday, the yield was at 4.319%
• 2 – 10-year spread is trading at -46.0 basis points. At this time yesterday, the spread was at -41.4 basis points
• 2 – 30 year spread is trading at -35.6 basis points. At this time yesterday, the spread was at -28.8 basis points

In the European debt market, benchmark 10-year yields are trading mostly lower (the UK 10-year yield is the exception):