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☆ Euro slips below parity, yen steady ahead of Bank of Japan
▼ + stars: | 2022-10-28 | by ( ) www.cnbc.com time to read: +3 min

The euro held below parity on Friday as investors eyed a potential slowdown in future rate hikes by the European Central Bank, while the yen was on track for its best week in over two months ahead of a key central bank policy decision. "The ECB policy decisions were less hawkish than most had expected. The yen last bought 146.41 per dollar, and was on track for a nearly 1% weekly gain, its largest since August. The fragile currency has received support from suspected intervention by Japanese authorities to prop up the yen last Friday and on Monday. "At the moment, I don't really see any case for a shift in the Bank of Japan's monetary policy," said CBA's Kong.

☆ BOJ raises inflation forecasts, keeps ultra-low rates
▼ + stars: | 2022-10-28 | by ( ) www.reuters.com time to read: +1 min

TOKYO, Oct 28 (Reuters) - The Bank of Japan raised its inflation forecasts on Friday but maintained ultra-low interest rates, remaining a dovish outlier among a global wave of central banks tightening monetary policy. As widely expected, the BOJ kept unchanged its -0.1% target for short-term interest rates, and 0% for the 10-year government bond yield by a unanimous vote. It also maintained its dovish policy guidance that pledges to ramp up stimulus as needed, and projecting that short- and long-term interest rates will move at "current or lower levels." It projects inflation to hit 1.6% in fiscal 2024. Reporting by Leika Kihara, Tetsushi Kajimoto, Kantaro Komiya and Daniel Leussink Editing by Chang-Ran KimOur Standards: The Thomson Reuters Trust Principles.

☆ Euro slips below parity, yen steady ahead of BOJ
▼ + stars: | 2022-10-28 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

[1/2] U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. "The ECB policy decisions were less hawkish than most had expected. The yen last bought 146.41 per dollar, and was on track for a nearly 1% weekly gain, its largest since August. The fragile currency has received support from suspected intervention by Japanese authorities to prop up the yen last Friday and on Monday. "At the moment, I don't really see any case for a shift in the Bank of Japan's monetary policy," said CBA's Kong.

☆ Asian shares slip, yen steady ahead of Bank of Japan meeting
▼ + stars: | 2022-10-28 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

SINGAPORE, Oct 28 (Reuters) - Asian equities edged lower on Friday as investors grappled with mixed earnings reports, while the Japanese yen held firm ahead of the Bank of Japan's policy review. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.32%, set to snap a three-day winning streak. On Thursday, the European Central Bank raised interest rates again, but said "substantial" progress had already been made in its bid to fight off a surge in inflation. The central bank is set to keep ultra-low interest rates and remind markets it will remain a dovish outlier among a wave of central banks tightening monetary policy. Inflation in the Tokyo area thus exceeded the central bank's 2% target for five straight months.

☆ Asia-Pacific markets fall; Bank of Japan expected to keep rates unchanged
▼ + stars: | 2022-10-28 | by ( Abigail Ng | ) www.cnbc.com time to read: 1 min

The Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Monday, April 25, 2022. Shares in the Asia-Pacific fell ahead of the Bank of Japan's interest rate decision and a slew of companies in the region reporting earnings. The Nikkei 225 in Japan fell 0.89% in early trade, while the Topix dipped 0.51%. The Bank of Japan is expected to keep rates at ultra-low levels, according to forecasts in a Reuters poll. Some Chinese airlines listed in Hong Kong will report earnings, along with electric vehicle maker BYD.

TOKYO, Oct 28 (Reuters) - Core consumer prices in Japan's capital, a leading indicator of nationwide figures, rose 3.4% in October from a year earlier, data showed on Friday, marking the fastest annual pace since 1989 in a sign of broadening inflationary pressure. The rise in the Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, exceeded a median market forecast for a 3.1% gain and followed a 2.8% gain in September. Inflation in the Tokyo area thus exceeded the central bank's 2% target for five straight months. BOJ Governor Haruhiko Kuroda has repeatedly said the bank must maintain ultra-low interest rates on the view the recent cost-push inflation will likely prove temporary. Reporting by Takahiko Wada and Leika Kihara; Editing by Chang-Ran Kim and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ BOJ keeps ultra-low interest rates, defies global tightening trend
▼ + stars: | 2022-10-27 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

But the central bank revised up its price forecasts through 2024 and warned that risks were skewed to the upside, nodding to recent signs that inflationary pressure was broadening. "Accelerating underlying inflation is expected to heighten medium- and long-term inflation expectations ... and lead to sustained price rises accompanied by wage gains," it said. As widely expected, the BOJ left unchanged its -0.1% target for short-term interest rates and a pledge to guide the 10-year bond yield around 0%. The central bank also maintained its dovish guidance projecting that short- and long-term rates will remain at "present or lower levels." In a sign of its concern over global recession fears, however, the BOJ cut its economic growth forecasts for fiscal 2022 and 2023.

Oct 28 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeeverThe heat is off the Bank of Japan. The BOJ announces its policy decision on Friday against a much calmer market backdrop than only a few days ago. Economists expect no change to the bank's ultra-loose stance and an upward revision to the inflation outlook. Other Japanese data due on Friday include inflation and unemployment, which could also drive trading sentiment in Asia. The dollar has slumped to a three-week low against the yen and below the level that prompted the BOJ's historic yen-buying intervention on Sept. 22.

☆ Aggressive rate hikes the name of the game for big central banks
▼ + stars: | 2022-10-27 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 27 (Reuters) - The European Central Bank delivered a second straight 75-basis-point interest rate hike on Thursday, the latest sign that major central banks are serious about curbing hot inflation. Central banks in the 10 big developed economies have raised rates by a combined 2,165 basis points (bps) in this cycle to date, with Japan the holdout "dove." But the pace of these rate rises is starting to slow - Canada just delivered a smaller-than-anticipated rate hike. That would be the fourth straight rate increase of that magnitude, bringing the policy rate to the 3.75%-4.00% range as part of what has been the sharpest set of U.S. rate increases in about 40 years. Reuters Graphics7) SWEDENSweden's central bank raised its key rate on Sept. 20 by a larger-than-expected one percentage point to 1.75%.

☆ Japan to keep ultra-low interest rates, defy global tightening trend
▼ + stars: | 2022-10-27 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

The revised projections are likely to reinforce market expectations the BOJ will stay the course in underpinning a fragile recovery with ultra-low interest rates, analysts say. At the two-day meeting ending on Friday, the BOJ is widely expected to maintain its -0.1% target for short-term interest rates and a pledge to guide the 10-year bond yield around 0%. In July, the BOJ forecast core consumer inflation to hit 2.3% in fiscal year ending March 2023 before slowing to 1.4% the following year. It projects the economy to expand 2.4% in the current fiscal year and rise 2.0% in the next. Kuroda has stressed the need to maintain ultra-loose policy on the view the recent cost-push inflation will prove temporary.

☆ BOJ ramps up bond buying ahead of policy meet, yields fall sharply
▼ + stars: | 2022-10-26 | by ( Junko Fujita | ) www.reuters.com time to read: +2 min

The 20-year JGB yield slipped 8.5 bps points to 1.110%, its lowest since Oct. 18. "The market sentiment was good today as U.S. Treasury yields fell overnight so JGB yields would have fallen anyway," said Naka Matsuzawa, a strategist at Nomura Securities. Yields on shorter end notes also fell on Wednesday, with the two-year JGB yield retreating 1 bps to -0.025%. The BOJ offered to buy 350 billion yen ($2.36 billion) of bonds with 10- and 25-year maturities, up from 250 billion yen it had planned. The BOJ said it would also buy 575 billion yen of bonds with 3- to 5-year maturities, up from a planned 475 billion yen, and 150 billion yen of bonds with maturities more than 25 years, up from 100 billion yen.

☆ BOJ increases bond buying, yields fall sharply
▼ + stars: | 2022-10-26 | by ( Junko Fujita | ) www.reuters.com time to read: +1 min

The market immediately reacted to the move, with the 30-year JGB yield falling 10 basis points (bps) to 1.475%, its lowest since Oct. 14. The BOJ conducted emergency bond buying operations for two straight sessions last week only to see yields keep rising. Yields on shorter end notes also fell, with the two-year JGB yield retreating 1 bps to -0.025%. The BOJ offered to buy 350 billion yen ($2.36 billion)of bonds with 10- and 25-year maturities, up from 250 billion yen it had planned. The BOJ said it would also buy 575 billion yen of bonds with 3- to 5-year maturities, up from a planned 475 billion yen, and 150 billion yen of bonds with maturities more than 25 years, up from 100 billion yen.

☆ Dollar sags as bets build for less hawkish Fed
▼ + stars: | 2022-10-26 | by ( ) www.cnbc.com time to read: +4 min

The dollar wallowed near a three-week low versus major peers on Wednesday as more signs of economic weakness in the United States fanned speculation about a less hawkish Federal Reserve. The euro also remained near a six-week high, trading less than half a cent from parity with the greenback. The European Central Bank decided policy on Thursday and is widely expected to raise rates by 75 basis points. The dollar reached a 32-year top at 151.94 yen on Friday, but was then beaten back as far as 144.55 amid two bouts of suspected Bank of Japan intervention either side of the weekend. "A further pullback in the U.S. dollar seems to be the Aussie's best chance of sustaining pushes above $0.64.

Oct 27 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeeverFirst Australia, now Canada. The Bank of Canada on Wednesday raised rates by 50 basis points, less than the 75 bps markets had expected. "We are getting closer to the end of this tightening phase," BOC chief Tiff Macklem said, citing recession fears. The European Central Bank and Bank of Japan are up next with policy decisions in the next 48 hours. But if the remaining heavyweight U.S. earnings this week beat forecasts and the ECB and BOJ play ball, it could have further to run.

☆ Analysis: Wages, not yen, key to when Japan shifts away from ultra low rates
▼ + stars: | 2022-10-26 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

"It's a once-in-a-lifetime opportunity for Japan to finally see a positive wage-inflation cycle kick off," said one of the sources. Were the BOJ to tweak YCC, the most likely first step would be either to hike the 10-year yield target, or widen the implicit 50-basis-point band set around it. LOW RATES NOT FOREVERThe BOJ rules out using rate hikes to stem yen falls, as Japanese law gives the government, not the central bank, jurisdiction over exchange-rate policy. In April, dovish board member Asahi Noguchi said wages must rise by nearly 3% for the BOJ to tweak its ultra-loose policy. Yields on super-long bonds have risen to multi-year highs despite the BOJ's aggressive bond buying, casting doubt on the effectiveness of YCC.

[1/2] Boards displaying buying and selling rates are seen outside of currency exchange outlets in London, Britain, July 31, 2019. read moreRishi Sunak became Britain's third prime minister in two months on Tuesday, tasked with tackling a mounting economic crisis and a warring political party. The U.S. dollar was broadly weaker amid signs that Federal Reserve rate hikes are slowing the world's biggest economy. YEN AND YUANThe yen firmed against the dollar after suspected Bank of Japan (BOJ) intervention on Friday and Monday. At 147.665 yen, the dollar was down from a 32-year high of 151.94 on Friday, which appeared to trigger successive bouts of BOJ intervention.

☆ Sterling rises as Sunak prepares to become PM, euro awaits ECB hike
▼ + stars: | 2022-10-25 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

LONDON, Oct 25 (Reuters) - Sterling rose on Tuesday supported by improved risk sentiment as Rishi Sunak prepared to become Britain's prime minister, while the euro steadied ahead of an expected rate hike by the European Central Bank (ECB) on Thursday. The U.S. dollar edged up but was not far from its lowest level in October amid signs Federal Reserve rate hikes are slowing the world's biggest economy. Sunak will become Britain's next prime minister, Downing Street said on Monday. Sterling edged toward this month's highs, up 0.3% to $1.13125 at 0825 GMT but currency strategists expected the currency, down more than 16% against the dollar this year, to remain under pressure. "Should the current level of UK political noise ease we would be wary of sterling continuing to cheapen versus both the U.S. dollar and euro".

☆ Delayed, not denied
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +2 min

Markets have welcomed Sunak's appointment, with sterling creeping towards a one-month high and gilts rallying on the news. Register now for FREE unlimited access to Reuters.com RegisterMeanwhile, the did-they-or-didn't-they question around yen intervention continues. The beaten-down currency traded at 148.81 per dollar following two consecutive days of suspected Bank of Japan intervention straddling the weekend. Japanese Finance Minister Shunichi Suzuki insists the two policy objectives - monetary easing to get wage growth up and intervention to defend the yen - are not contradictory. ($1 = 0.8853 pounds)Register now for FREE unlimited access to Reuters.com RegisterReporting by Ankur Banerjee; Editing by Edmund KlamannOur Standards: The Thomson Reuters Trust Principles.

☆ POLL Rising U.S. rates pose biggest risk for Japan but recession unlikely
▼ + stars: | 2022-10-25 | by ( Kantaro Komiya | Devayani Sathyan | ) www.reuters.com time to read: +4 min

REUTERS/Florence Lo/IllustrationTOKYO, Oct 25 (Reuters) - The biggest risk to Japan's economy over the next year is a prolonged period of U.S. monetary tightening, although the world's third-largest economy is unlikely to sink into a recession, the majority of economists polled by Reuters said. Policymakers worldwide, including the International Monetary Fund, have cut global growth projections for 2023, citing elevated prices and higher cost of borrowing. While most economists agreed that such risks would not plunge Japan into a recession, they said that was mainly owing to a low base. "Japan's economy appears robust compared with overseas peers, but that's just because its recovery from the pandemic has been lagging behind," said Fukoku's Takamatsu. Elsewhere in the poll, a median estimate of 34 respondents had the Japanese economy expanding an annualised 2.0% in October-December, slightly better than the 1.9% forecast in the September poll.

☆ BOJ easing and govt FX intervention not contradictory - finmin Suzuki
▼ + stars: | 2022-10-25 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

"Monetary easing aimed at sustainable and stable price hikes including wage growth, and currency intervention in response to excessive market moves, are different in terms of policy objectives, and thus they are not contradictory," Suzuki said. Japanese authorities are in constant touch with U.S. counterparts and stand ready to take appropriate action in the currency market against volatile yen moves, Suzuki said. The minister repeated that the government would not tolerate excessively volatile yen moves driven by speculative trading. "If we leave unattended sharply volatile currency moves, driven by speculative trading, that would affect companies and households," Suzuki said. Japanese authorities are in constant touch with U.S. counterparts and stand ready to take appropriate action in the currency market against volatile yen moves, Suzuki said.

☆ Dollar eases amid bets on less hawkish Fed; sterling firm
▼ + stars: | 2022-10-25 | by ( Kevin Buckland | ) www.reuters.com time to read: +4 min

The yen held firm on the stronger side of 149 per dollar following two consecutive days of suspected Bank of Japan (BOJ) intervention straddling the weekend. Economists polled by Reuters expect the pace of rate increases to slow to 50 basis points in December, matching bets in money markets. At 149.00 yen, the dollar was down from the 32-year high of 151.94 on Friday that appeared to trigger successive bouts of BOJ intervention. Whatever the tactics, we still expect USD/JPY to recover within a few weeks after BOJ intervention ends." The ECB looks set to hike rates by 75 basis points on Thursday to try and rein in red-hot inflation.

☆ Japan in constant touch with U.S. on currency market, Finance Minister Suzuki says
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +1 min

TOKYO, Oct 25 (Reuters) - The Japanese authorities are in constant touch with their U.S. counterparts and stand ready to take appropriate action in the currency market against volatile yen moves, Finance Minister Shunichi Suzuki said on Tuesday. Suzuki also said he saw no contradiction between the government's yen-buying currency intervention and the Bank of Japan's ultra-loose monetary policy. "The BOJ is responsible for deciding monetary policy," Suzuki told a regular news conference, adding that the central bank's policy is aimed at achieving price stability. Suzuki repeated that the government would not tolerate excessively volatile yen moves driven by speculative trading. "If we leave sharply volatile currency moves, driven by speculative trading, unattended, that would affect companies and households," Suzuki said.

☆ Japan keeps warning on market volatility, raises view on capex in report
▼ + stars: | 2022-10-25 | by ( Kantaro Komiya | ) www.reuters.com time to read: +3 min

TOKYO, Oct 25 (Reuters) - Japan reiterated a warning that "full attention" should be paid to market volatility in its monthly economic report published on Tuesday, following the government's repeated market interventions in the wake of the yen's slide to a 32-year low. The October economic report kept the overall assessment of the economy unchanged for a fourth month, saying it was in a moderate recovery, though it raised its view on business spending while downgrading its assessment of imports. On private consumption, which accounts for more than half of Japanese gross domestic product, the government kept its view that it was moderately picking up. Service spending was rising, but consumer sentiment has tumbled due to inflation, especially among low-income earners, the official said. ($1 = 148.8400 yen)Register now for FREE unlimited access to Reuters.com RegisterReporting by Kantaro Komiya; Editing by David HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: Delayed, not denied
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +2 min

☆ Dollar rises amid suspected BOJ intervention; pound choppy as Sunak gets top job
▼ + stars: | 2022-10-24 | by ( John Mccrank | ) www.reuters.com time to read: +4 min

Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. Yen overnight volatility surged to its highest since Sept. 21, the day before the BOJ stepped in to prop up the currency for the first time since 1998. At 3:30 p.m. EDT (1930 GMT), the dollar was up 0.089% at 111.93 against a basket of six peer currencies. Sterling was last down 0.16% at $1.12915, off an overnight high above $1.14. The euro was last up 0.18% at $0.98805, while China's offshore yuan plummeted to a new record low against the dollar of 7.3322.

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