Latest news with #CommonwealthBankofAustralia
Yahoo
2 days ago
- Business
- Yahoo
Yen slides ahead of Bank of Japan policy decision
The yen fell against the dollar ahead of a Bank of Japan decision Tuesday, with officials expected to hold interest rates steady but tweak their bond purchase policy. The central bank last year said it would scale down its huge purchases of government bonds -- part of attempts to move away from a quantitative easing programme designed to banish stagnation and harmful deflation. It is now considering slowing the pace of these cutbacks, analysts and media reports said. "Slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty," Carol Kong, an analyst at the Commonwealth Bank of Australia, told AFP. Speculation of such a move "intensified after a surge in the 'super long' Japanese Government Bond (JGB) yields in recent months", she explained. The dollar surged higher than 145 yen in morning trade, compared with levels of around 144.30 yen on Monday. "The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BoJ... alongside negative spill-overs for Japan from the Middle East conflict," said Lee Hardman of MUFG. The BoJ is expected to keep its main interest rate around 0.5 percent, lower than the US Federal Reserve's 4.25-4.5 percent. Bank officials began lifting borrowing costs last year after nearly two decades of ultra-loose monetary policies aimed at kick-starting torpid economic growth in Japan. "The BoJ will likely hold off on rate hikes until there is further clarity on US trade policy," Kong said. Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium. Trump also announced an additional 24 percent "reciprocal" tariff on Japan in early April but later paused it along with similar measures on other countries. Prime Minister Shigeru Ishiba said Monday there had been no breakthrough on a US trade deal after talks with President Donald Trump on the sidelines of the G7 summit in Canada. "We still believe the Bank may hike rates in the second half of the year as it remains committed to normalising monetary policy," said Katsutoshi Inadome of SuMi TRUST. "We expect that domestic demand will remain solid and that there is a chance economic conditions will improve to the point where the BoJ can consider interest hikes," he said. kh-jug-kaf/dan Sign in to access your portfolio
Business Recorder
4 days ago
- Business
- Business Recorder
Nervy markets await Fed as Mideast conflict rages on
SINGAPORE: Concerns over escalating hostilities in the Middle East stayed front and centre in markets on Wednesday, sending oil prices higher and investors rushing for the safety of U.S. Treasuries and the dollar while dumping stocks. Investors have grown increasingly nervous over the possibility of a more direct U.S. military involvement as the Israel-Iran air war entered a sixth day, with President Donald Trump calling for Iran's unconditional surrender and warning U.S. patience was wearing thin. 'Clearly the Middle East issues have not been solved, and comments by President Trump just mean that things could get more dangerous in that part of the world,' said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (CBA). 'The markets are trying to figure out that risk of a big U.S. military intervention. It's hard to say exactly what the market is thinking, but judging by the oil price and currencies, they're certainly pricing in at least some risk that something goes very bad there.' Oil prices extended their climb on Wednesday, with Brent crude futures up 0.33% to $76.70 per barrel while U.S. crude rose 0.45% to $75.18 a barrel. Both had jumped more than 4% in the previous session. The broad risk-off moves across markets also continued to gather pace. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.26% as did EUROSTOXX 50 futures , which declined 0.4%. U.S. stock futures were little changed after the cash session on Wall Street ended in the red overnight. In currencies, the dollar firmed at a one-week high of 145.445 yen and held to most of its gains against other peers. The euro struggled to recover from its 0.7% fall on Tuesday, and last bought $1.1487. Sterling edged slightly higher to $1.3435, having slid 1.1% in the previous session. Stocks slide, oil and gold jump after Israel strikes Iran The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. 'The war has demonstrated that the U.S. dollar still retains a bit of haven status in certain situations, such as when the war is seen to raise the risk of disrupting global oil supply, and when the war diverts traders' attention away from those risks that are U.S.-centric,' said Thierry Wizman, global FX and rates strategist at Macquarie Group. FED outcome The conflict in the Middle East, combined with prolonged uncertainty over Trump's tariffs and signs of fragility in the U.S. economy, make for a challenging backdrop ahead of the Federal Reserve's policy decision later on Wednesday. U.S. retail sales fell by a more-than-expected 0.9% in May, data showed on Tuesday, marking the biggest drop in four months. Expectations are for the Fed to stand pat on rates, though focus will also be on the central bank's updated projections for the economy and the benchmark interest rate. 'We do not anticipate much novelty from the Fed,' said Erik Weisman, chief economist at MFS Investment Management. 'The only area of interest may come from the new set of forecasts under the Summary of Economic Projections, which may point to slightly slower growth, combined with slightly higher inflation.' U.S. Treasury yields were steady in Asia after falling on Tuesday, as investors scooped up the safe-haven bonds in the wake of latest developments in the Israel-Iran conflict. Bond yields move inversely to prices. The benchmark 10-year yield was last at 4.4027%, having fallen roughly 6 basis points in the previous session. The two-year yield stood at 3.9581%. Elsewhere, spot gold eased 0.12% to $3,384.73 an ounce.
New Straits Times
4 days ago
- Business
- New Straits Times
Nervy markets await Fed as Mideast conflict rages on
SINGAPORE: Concerns over escalating hostilities in the Middle East stayed front and centre in markets on Wednesday, sending oil prices higher and investors rushing for the safety of US Treasuries and the dollar while dumping stocks. Investors have grown increasingly nervous over the possibility of a more direct US military involvement as the Israel-Iran air war entered a sixth day, with President Donald Trump calling for Iran's unconditional surrender and warning US patience was wearing thin. "Clearly the Middle East issues have not been solved, and comments by President Trump just mean that things could get more dangerous in that part of the world," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (CBA). "The markets are trying to figure out that risk of a big US military intervention. It's hard to say exactly what the market is thinking, but judging by the oil price and currencies, they're certainly pricing in at least some risk that something goes very bad there." Oil prices extended their climb on Wednesday, with Brent crude futures up 0.33 per cent to US$76.70 per barrel while US crude rose 0.45 per cent to US$75.18 a barrel. Both had jumped more than 4 per cent in the previous session. The broad risk-off moves across markets also continued to gather pace. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.26 per cent as did EUROSTOXX 50 futures, which declined 0.4 per cent. US stock futures were little changed after the cash session on Wall Street ended in the red overnight. In currencies, the dollar firmed at a one-week high of 145.445 yen and held to most of its gains against other peers. The euro struggled to recover from its 0.7 per cent fall on Tuesday, and last bought US$1.1487. Sterling edged slightly higher to US$1.3435, having slid 1.1 per cent in the previous session. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. "The war has demonstrated that the US dollar still retains a bit of haven status in certain situations, such as when the war is seen to raise the risk of disrupting global oil supply, and when the war diverts traders' attention away from those risks that are US-centric," said Thierry Wizman, global FX and rates strategist at Macquarie Group. FED OUTCOME The conflict in the Middle East, combined with prolonged uncertainty over Trump's tariffs and signs of fragility in the US economy, make for a challenging backdrop ahead of the Federal Reserve's policy decision later on Wednesday. US retail sales fell by a more-than-expected 0.9 per cent in May, data showed on Tuesday, marking the biggest drop in four months. Expectations are for the Fed to stand pat on rates, though focus will also be on the central bank's updated projections for the economy and the benchmark interest rate. "We do not anticipate much novelty from the Fed," said Erik Weisman, chief economist at MFS Investment Management. "The only area of interest may come from the new set of forecasts under the Summary of Economic Projections, which may point to slightly slower growth, combined with slightly higher inflation." US Treasury yields were steady in Asia after falling on Tuesday, as investors scooped up the safe-haven bonds in the wake of latest developments in the Israel-Iran conflict. Bond yields move inversely to prices. The benchmark 10-year yield was last at 4.4027 per cent, having fallen roughly 6 basis points in the previous session. The two-year yield stood at 3.9581 per cent. Elsewhere, spot gold eased 0.12 per cent to US$3,384.73 an ounce.
Perth Now
4 days ago
- Business
- Perth Now
Asian markets nervous as Mideast conflict rages on
Asian stocks have fallen as concerns over escalating hostilities in the Middle East stayed front and centre on Wednesday, sending oil prices higher and investors rushing for the safety of US Treasuries and the dollar. Investors have grown increasingly nervous over the possibility of a more direct US military involvement as the Israel-Iran air war entered a sixth day, with President Donald Trump calling for Iran's unconditional surrender and warning US patience was wearing thin. "Clearly the Middle East issues have not been solved, and comments by President Trump just mean that things could get more dangerous in that part of the world," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (CBA). "The markets are trying to figure out that risk of a big US military intervention. It's hard to say exactly what the market is thinking, but judging by the oil price and currencies, they're certainly pricing in at least some risk that something goes very bad there." Oil prices extended their climb on Wednesday, with Brent crude futures up 0.33 per cent to $US76.70 per barrel while US crude rose 0.45 per cent to $US75.18 a barrel. Both had jumped more than 4% in the previous session. The broad risk-off moves across markets also continued to gather pace. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.26 per cent as did EUROSTOXX 50 futures, which declined 0.4 per cent. Japan's Nikkei index slipped 0.15 per cent, while the broader Topix fell by 0.18 per cent. In South Korea, the Kospi dropped 0.44 per cent. US stock futures were little changed after the cash session on Wall Street ended in the red overnight. In currencies, the dollar firmed at a one-week high of 145.445 yen and held to most of its gains against other peers. The euro struggled to recover from its 0.7 per cent fall on Tuesday, and last bought $US1.1487. Sterling edged slightly higher to $US1.3435, having slid 1.1 per cent in the previous session. The spike in oil prices is a negative for the yen and euro at the margin as both Japan and the EU are major importers of energy, while the United States is an exporter. "The war has demonstrated that the US dollar still retains a bit of haven status in certain situations, such as when the war is seen to raise the risk of disrupting global oil supply, and when the war diverts traders' attention away from those risks that are US-centric," said Thierry Wizman, global FX and rates strategist at Macquarie Group. The conflict in the Middle East, combined with prolonged uncertainty over Trump's tariffs and signs of fragility in the US economy, make for a challenging backdrop ahead of the Federal Reserve's policy decision later on Wednesday. US retail sales fell by a more-than-expected 0.9 per cent in May, data showed on Tuesday, marking the biggest drop in four months. Expectations are for the Fed to stand pat on rates, though focus will also be on the central bank's updated projections for the economy and the benchmark interest rate. "We do not anticipate much novelty from the Fed," said Erik Weisman, chief economist at MFS Investment Management. "The only area of interest may come from the new set of forecasts under the Summary of Economic Projections, which may point to slightly slower growth, combined with slightly higher inflation." US Treasury yields were steady in Asia after falling on Tuesday, as investors scooped up the safe-haven bonds in the wake of latest developments in the Israel-Iran conflict. Bond yields move inversely to prices. The benchmark 10-year yield was last at 4.4027 per cent, having fallen roughly six basis points in the previous session. The two-year yield stood at 3.9581 per cent. Elsewhere, spot gold eased 0.12 per cent to $US3,384.73 an ounce.
Qatar Tribune
4 days ago
- Business
- Qatar Tribune
BOJ holds rates, says it will slow bond purchase taper
Agencies The Bank of Japan kept interest rates unchanged Tuesday and said it would taper its purchase of government bonds at a slower pace amid concerns about the effect of trade uncertainty on the world's number four economy. The central bank spent years buying up Japanese Government Bonds (JGBs) to keep yields low as part of an ultra-loose monetary policy aimed at banishing stagnation and harmful deflation. But it began moving away from that programme last year as inflation began to pick up and the yen weakened, and hiked interest rates for the first time since 2007 and began winding down its JGB purchases. It has since then lifted borrowing costs several times to 0.5 percent, their highest level in 17 years, and continued to buy fewer bonds. However, analysts say uncertainty sparked by U.S. President Donald Trump's trade war has led officials to hold off more hikes, and on Tuesday they held rates again, while saying they would slow the pace of JGB reductions. Purchases will be cut in principle 'by about 200 billion yen each calendar quarter from April-June 2026' -- from around 400 billion yen per quarter. Carol Kong, an analyst at the Commonwealth Bank of Australia outlined the possible reasons for the decision ahead of the release of the BOJ policy statement. 'Slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty,' she told AFP. Speculation of such a move 'intensified after a surge in the 'super long' Japanese Government Bond (JGB) yields in recent months', Kong added. The yen weakened on Tuesday, with the dollar buying 144.80 yen around midday, compared with around 144.30 yen on Monday, with the BOJ's main rate much lower than the U.S. Federal Reserve's 4.25-4.5 percent. 'The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BOJ... alongside negative spillovers for Japan from the Middle East conflict,' Lee Hardman of MUFG had said before the decision. The BOJ also highlighted the risks ahead for the economy, saying 'growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors'. However, 'factors such as accommodative financial conditions are expected to provide support', it added. Kong added that the bank 'will likely hold off on rate hikes until there is further clarity on US trade policy'. Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium. Trump also announced an additional 24 percent 'reciprocal' tariff on the country's goods in early April but later paused it along with similar measures on other trading partners. Prime Minister Shigeru Ishiba said Monday there had been no breakthrough on a trade deal after talks with Trump on the sidelines of the G7 summit in Canada. 'We still believe the Bank may hike rates in the second half of the year as it remains committed to normalising monetary policy,' said Katsutoshi Inadome of SuMi TRUST. 'We expect that domestic demand will remain solid and that there is a chance economic conditions will improve to the point where the BoJ can consider interest hikes,' he said.
