Morning Markets: One down, one to go
The first of today's twin central bank policy meetings is done and dusted and equities globally are rallying in response to the Bank of Japan's decision to keep interest rates steady, retain the quantitative easing magnitude, up the effort to hit its 2% inflation target, and aim to steepen the yield curve.
Although markets initially seemed disappointed with the BoJ policy tweaks (on the basis of insuffiency), confidence in the bank's determination to address the spectre of deflation subsequently picked up. The Nikkei closed higher while the yen weakened against the dollar. The greenback also pushed ahead against the euro and the dollar index.
Looking ahead, markets will now turn their focus to tonight's Federal Open Market Committee meeting though expectations of a rate hike in the US have melted away to 20% and below.
- US: FOMC meeting and press conference (1800 GMT)
- Bank of Japan left negative rates unchanged at minus 0.1%
- BoJ says it will maintain its bond-buying pace, coupled with 'yield curve control'
- In reaction, the Japanese 10-year bond yield jumped above zero for first time since March
- The benchmark 10-year JGB yield rose to as high as plus 0.005%
- The Nikkei climbed more than 1.5% after the announcement and the yen fell
- The ASX extended earlier gains to be up 0.6%
- Japanese exports dropped 9.6% in August from a year earlier
- Imports fell 17.3%, resulting in a trade deficit of 18.7 billion yen ($184 million).
- Earlier, Asian stocks had held back and the JPY rose to a one-week high in early Asia trade
- In morning trade, shares fell in Hong Kong, Japan and Singapore
- The MSCI Asia Pacific Index was down 0.1% as of 1146 Tokyo Time
- US crude oil climbed as much as 2.5% to $45.14/barrel
- The yen strengthened 0.1% to 101.59 per dollar in early trade
- After the BoJ announcement the dollar traded as high as 102.67 against the yen
- The Aussie rose slightly to 0.7557 prior to the BoJ announcement
- The AUD was trading at 0.7549 at 0700 GMT
From the Floor
XAU rising. "The BoJ decision has prompted demand for gold," says Hansen
Upside in view. "Our positions should benefit from a Fed hike," says Garnry
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
There's doubting what's on the menu in Europe and the US today - the reality is that we'll hear what will constitute a Fed hike and little more, says James Picerno
Next is the Fed
The Bank of Japan underwhelmed again, writes Max McKegg, and kept its policy rate at minus 0.1%
Asia left hanging
Asia was on tenterhooks this morning with assets making no real headway, as traders awaited direction from the Bank of Japan, reports Saxo's Singapore team
Braced for central banks
Investors spent much of the day awaiting crucial updates from US and Japanese central bankers, writes the team from Saxo Capital Markets (Australia)
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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