- BOJ will likely announce policy tightening plans
- Split around raising interest rates for second time this year
The yen lost ground in Asian trade against a basket of major currencies, extending losses for the second day against the dollar and backing off 2-⅕ month highs on active profit-taking, as investors shun new buying positions ahead of the Bank of Japan’s policy meeting.
Later today, the Bank of Japan will convene to discuss policy tools and developments, and will likely announce plans of policy tightening, with a current split between policymakers on a second rate hike this year.
The Price
The JPY/USD rose 0.2% today to 154.24, with a session-low at 153.62.
The yen lost 0.2% yesterday against the dollar, the second loss in three sessions on profit-taking away from 2-⅕ month highs at 151.94.
The BOJ
The Bank of Japan is convening later today with decisions expected tomorrow, with the central bank likely to announce a major cut to government bonds purchases.
The BOJ has promised at the June 13-14 meeting to delineate its policy tightening plans at the upcoming meeting, amid increasing pressures to reduce the bank’s massive $5 trillion budget.
Aside from reducing bonds purchase, there’s a clear split among analysts and policymakers about the potential of another 0.1% interest rate hike this year.
The BOJ’s attempts to normalize and tighten policies come at a time when major central banks are beginning to work in the opposite direction and to ease policies after years of aggressive policy tightening and rate hikes.
Oil prices fell on Monday as focus grew on the Middle East geopolitical conflict.
The US Energy Administration announced a purchase of 4.65 million barrels of crude oil to bolster the strategic reserves, with an average price of $76.92 a barrel.
On trading, Brent futures due in September fell 1.65% today, or $1.35 to $79.78, the lowest since June 7.
US crude futures due in September slid 1.75%, or $1.35 to $75.81 a barrel, the lowest since June 7.
Gold prices stabilized on Monday as the dollar inched up against most major rivals while traders analyze demand on the precious metal.
Earlier government data showed total Chinese gold consumption fell by 5.6% y/y to 523.75 tonnes in the first half of the year, as demand on gold jewelries spiked 26.7% to 270 tonnes.
Now traders await the beginning of the Federal Reserve’s policy meeting tomorrow, expected to end up with no changes in interest rates, but the Fed might provide clues on the future of interest rates.
Separately, the dollar index rose 0.2% as of 21:08 GMT to 104.5, with a session-high at 104.7, and a low at 104.1.
On trading, gold spot prices stabilized at $2381 an ounce as of 21:10 GMT.
US stock indices rose on Monday as markets await the release of earnings results for major corporations.
This week, Microsoft, Starbucks, Advanced Micro Devices, Meta, Qualcomm, and Boeing will release their results.
Last week, Tesla and Alphabet released their results as well, with the tech sector taking a hammering overall on the NASDAQ.
On trading, Dow Jones rose 0.1%, or 11 points to 40,592 as of 17:26 GMT, while S&P 500 rose 0.3%, or 18 points to 54,77, while NASDAQ added 0.5%, or 90 points to 17,447.
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