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The yen was last down about 0.15% at 136.36 after a knee-jerk plunge of as much as 0.62% after the BOJ kept policy unchanged in Governor Haruhiko Kuroda's final policy meeting before retirement. Despite some volatility against the yen, the U.S. dollar was mostly flat on Friday. Against a basket of currencies, the U.S. dollar index was little changed at 105.28 but remained on track for a weekly gain of 0.73%. The focus now turns to the closely watched nonfarm payrolls report later on Friday, the next major data point that could offer clues on the Fed's next steps for monetary policy. According to a Reuters survey of economists, nonfarm payrolls likely increased by 205,000 jobs in February after surging by 517,000 in January.

☆ Dollar loses steam after jobless claims data, while Kuroda takes center stage in Asia
▼ + stars: | 2023-03-10 | by ( ) www.cnbc.com time to read: +3 min

An employee deals with U.S. one-hundred dollar banknotes at a bank on June 16, 2022 in Hai an, Nantong City, Jiangsu Province of China. The yen held steady in early Asia trade, and was last 0.2% higher at 135.89 per dollar, retreating from a nearly three-month low hit earlier in the week. Nonetheless, the jump in jobless claims was enough to cause traders to unwind some bets that U.S. rates would rise much higher than previously expected. The Fed funds rate is projected to peak just below 5.5% by July. Against a basket of currencies, the U.S. dollar index fell 0.12% to 105.12 but remained on track for a weekly gain of nearly 0.6%.

This is the market backdrop against which the BOJ delivers its last policy decision under Kuroda. It is widely expected to start reversing its super-loose policy later this year, once Kuroda has long left the building. The BOJ already tweaked Kuroda's 'yield curve control' policy in December, doubling the effective cap on the 10-year government bond yield to 0.50%. Markets have bet heavily that the BOJ will be forced to restore 'normal' bond market functioning by raising it again soon or even abandoning it. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ European markets head for lower open as investors weigh economic outlook
▼ + stars: | 2023-03-09 | by ( Holly Ellyatt | ) www.cnbc.com time to read: 1 min

European markets are heading for a lower open Thursday as investors digested more comments from U.S. Federal Reserve Chairman Jerome Powell. Powell reiterated his warning message to lawmakers that the central bank may raise interest rates higher than previously anticipated. However, he said he hasn't made up his mind about what the central bank will do regarding interest rates when it meets later in March. U.S. stock futures were flat on Wednesday night, while Asia-Pacific shares were mixed on Thursday as the Bank of Japan kicked off its two-day monetary policy meeting, with investors looking out for any policy changes that could accompany BOJ governor Haruhiko Kuroda's final meeting.

☆ BOJ set to keep ultra-low rates at Kuroda's final policy meeting
▼ + stars: | 2023-03-09 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

"After conducting an examination of its policy framework, the BOJ will either abandon the 10-year yield target or shift to one targeting a shorter duration," she said. At the two-day meeting ending on Friday, the BOJ is set to maintain its short-term interest rate target at -0.1% and that for the 10-year bond yield around 0%. Some market players bet the BOJ could widen the band set around the 10-year yield target, allowing the yield to rise up to 0.75%, from the current 0.5%, as early as Friday. But many analysts polled by Reuters expect any tweak in YCC to happen after Ueda takes over as new governor. Ueda will chair his first policy meeting on April 27-28, when the board will produce closely watched, fresh quarterly growth and price forecasts extending through fiscal 2025.

☆ Morning Bid: Is China exporting deflation?
▼ + stars: | 2023-03-09 | by ( ) www.reuters.com time to read: +2 min

Relief wasn't immediate, as the figures were tinged by doubt on the robustness of China's consumption rebound, with inflation in the country also at its slowest in a year. That's likely welcomed since analysts are making their latest upward revisions to U.S. and European interest rate expectations and do not need another inflationary shock from China's reopening. European futures steadied in Asia as markets assumed a holding pattern with the focus on U.S. data as the driver of interest rate movement. The Bank of Japan concludes a two-day meeting on Friday, though it is increasingly dancing to its own beat. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3%; Japanese stocks rose 0.6% on Thursday.

With the approval, government nominee Kazuo Ueda will officially succeed incumbent BOJ Governor Haruhiko Kuroda whose second, five-year term ends on April 8. But the BOJ's current policy is a necessary, appropriate means to achieve 2% inflation," Ueda told parliament last month, signalling that he was in no rush to hike rates. "I'll succeed the policy in the context of seeking to hit the BOJ's 2% inflation stably and sustainably," Ueda replied. Hiroshi Shiratori, a professor at Japan's Hosei University, see the appointment of Ueda as a sign Kishida wants the BOJ to phase out the legacy policy of Abenomics. "Ueda is saying the BOJ will maintain low rates for now.

☆ Markets start signalling Fed may be going too far - Amundi
▼ + stars: | 2023-03-09 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +3 min

Marasciulo said bond market valuations looked better than a month ago after a sell-off that has seen benchmark U.S. and German government bond yields rise around 40 bps since February started. Near-term, Marasciulo said it made sense to bet against the market consensus, by favouring a 25 bps move from the Fed, through trades favouring a steepening of the U.S. yield curve. On the Bank of Japan, which meets on Friday for the last time under outgoing governor Haruhiko Kuroda, Marasciulo said an end to yield curve control is "very likely". "So some sort of reaction function from the BOJ would tell us that probably the yield curve control should be the first thing to be reconsidered." A termination of yield curve control, which has helped pin down Japanese government bond yields, would steepen global yield curves by raising risk premiums on bonds overall, Marasciulo added.

SINGAPORE/LONDON, March 7 (Reuters) - The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. Elsewhere, the euro, sterling and yen were all broadly steady with the common currency at $1.0671 , the pound at $1.20245 , and one dollar worth 135.7 yen . That meant U.S. dollar index , which measures the unit against six major rivals, was also flat at 104.3, having slipped 0.26% a day earlier. "If (he) remains cautious ... that could trigger the dollar index to fall further below the 105.00-level ahead of the release of the NFP report on Friday." Investors are also awaiting the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday, when the central bank is set to stick to its ultra-loose monetary path.

☆ Dollar treads water ahead of Powell testimony; Aussie slips
▼ + stars: | 2023-03-07 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 7 (Reuters) - The U.S. dollar was tentative on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted that it might nearly be done with monetary tightening. Elsewhere, the U.S. dollar index , which measures it against six major rivals, was flat at 104.24, having slipped 0.26% overnight. "We suspect he will sound noncommittal for now and take his cues from the looming upcoming key data," said Cummins, who expects the Fed to raise rates by 50 basis points. Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March meeting. OCBC currency strategist Christopher Wong said Powell's testimony will be one of the last instances of Fed officials speaking before the black-out period commences ahead of the FOMC meeting.

☆ Dollar subdued ahead of Powell testimony; Aussie slips
▼ + stars: | 2023-03-07 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 7 (Reuters) - The U.S. dollar was tentative on Tuesday ahead of testimony by U.S. Federal Reserve chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia raised its cash rate by 25 basis points but tempered hawkishness in its statement. Meanwhile, the U.S. dollar index , which measures it against six major rivals, fell 0.077% to 104.170, having slipped 0.26% overnight. The Japanese yen was mostly flat at 135.94 to the dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday. Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March meeting. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year.

☆ Japan's real wages drop at fastest pace since 2014 as hot inflation takes toll
▼ + stars: | 2023-03-07 | by ( ) www.reuters.com time to read: +4 min

TOKYO, March 7 (Reuters) - Japan's real wages fell the most in nearly nine years in January, official data showed, as four-decade-high inflation squeezed the purchasing power of consumers and undercut efforts by policymakers to revive a COVID-ravaged economy. read moreInflation-adjusted real wages, a barometer of households' purchasing power, fell by 4.1% in January from a year earlier, the largest decrease since May 2014, labour ministry data showed on Tuesday. The fall in real wages comes as major Japanese firms including Toyota, Nintendo and Fast Retailing pay heed to policymakers' calls and union demands by announcing plans for historic pay rises. The feeble nominal growth in wages in January was well short of the 5.1% consumer inflation rate used to calculate pay in real terms. Currently, Japan's core consumer inflation, which excludes volatile fresh food prices but includes oil products, is running at 4.2%, the fastest pace since 1981.

☆ Dollar subdued ahead of Powell testimony
▼ + stars: | 2023-03-07 | by ( Ankur Banerjee | ) www.reuters.com time to read: +2 min

SINGAPORE, March 7 (Reuters) - The dollar was subdued on Tuesday ahead of testimony by Federal Reserve chair Jerome Powell, which investors will focus on for cues of the path the U.S. central bank is likely to take in tackling sticky inflation. The dollar index , which measures the U.S. currency against six major rivals, was 0.067% higher at 104.31, having skidded 0.26% overnight. The Australian dollar rose 0.01% against the U.S. dollar at $0.673 ahead of the Reserve Bank of Australia's policy decision later in the day where a quarter-percentage point rate hike is widely expected. The Japanese yen weakened 0.15% to 136.14 per dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year.

☆ Dollar dips, Powell testimony and jobs data in focus
▼ + stars: | 2023-03-06 | by ( Karen Brettell | ) www.reuters.com time to read: +3 min

The dollar index has bounced off a nine-month low of 100.80 reached on Feb. 1 as strong data and still-high inflation leads investors to reprice for higher rates for longer. Data on Monday showed that new orders for U.S.-manufactured goods fell in January, pulled down by a plunge in civilian aircraft bookings. Powell’s testimony will be watched for any new signals on whether the U.S. central bank could reaccelerate the pace of rate hikes in response to the recent data. The Chinese yuan and Aussie dollar fell after China on Sunday set a lower-than-expected target for economic growth this year of around 5%. The dollar gained 0.15% to 136.02 yen ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday.

☆ Asia stocks rally, bonds tense for U.S. rate tests
▼ + stars: | 2023-03-06 | by ( Wayne Cole | ) www.reuters.com time to read: +5 min

Japan's Nikkei (.N225) climbed 1.0% to a three-month top, while South Korean stocks (.KS11) added 0.6% helped by a softer reading on inflation. S&P 500 futures dipped 0.1% and Nasdaq futures 0.2%, after rallying on Friday as bond yields eased back a little. Futures imply a 72% chance the Fed will go by 25 basis points at its meeting on March 22. The BOJ jolted markets in December when it unexpectedly widened the allowed trading band for 10-year bond yields to between -50 and +50 basis points. Friday's pullback in bond yields helped gold recover some ground and it was trading at $1,855 an ounce .

March 6 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Monetary policy decisions from Australia and Japan on Wednesday and Friday, respectively, will be market-moving events too. Before that however, investors have a deluge of headlines from China this weekend to digest. Inflation figures from South Korea, The Philippines, Thailand and Taiwan this week will be closely watched by investors and policymakers alike. With the Fed seemingly on track to tighten policy further, a renewed rise in the dollar could intensify FX-fueled inflationary pressures in Asia.

The greenback briefly cut its losses after data showed the U.S. services sector grew at a steady pace in February, with new orders and employment rising to more than one-year highs. "This suggests traders think yields have been pushed too far, too fast, and could augur a peak in implied terminal rates," he added. "Next week's job opening and non-farm payrolls reports could generate a lift in yields and the dollar. The dollar eased 0.4% to 136.26 yen , after climbing to 137.10 on Thursday, the highest since Dec. 20. For the week, the dollar is down 0.4% versus the yen, but any gain would preserve its win streak since mid-January.

☆ Take Five: A manic March
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +5 min

Another dose of hot job growth after January's payrolls increase of 517,000 trounced estimates could stoke fears of more hawkish Fed action. Powell has said the January jobs report showed why the battle against inflation will "take quite a bit of time". Powell's comments and the jobs data could help settle what the Fed does later this month. The RBA hinted at further tightening at its meeting last month, but data since then has pointed the other way. After a red-hot January rally, bonds and equities retreated in February as strong data sparked concerns about more rate hikes.

The Tokyo core consumer price index (CPI), which excludes fresh food but includes fuel costs, exceeded the BOJ's 2% target for nine straight months. The slowdown was mostly due to the effect of government energy subsidies to curb soaring utility bills, the data showed. It marked the fastest year-on-year pace of increase since August 1991, when the index also rose 3.2%. Service inflation, which the BOJ sees as key to achieving sustained wage growth, perked up to 1.3% in February from 1.2% in January, the data showed. Nationwide core consumer prices rose 4.2% in January from a year earlier, hitting a fresh 41-year high, as an increasing number of companies passed on higher costs to households.

☆ Dollar eases toward first weekly loss since January as traders weigh Fed path
▼ + stars: | 2023-03-03 | by ( ) www.cnbc.com time to read: +2 min

The U.S. dollar eased back from a 2-1/2-month high versus the yen on Friday and weakened toward its first weekly loss since January against major peers as traders tried to gauge the path for Federal Reserve policy. Analysts polled by Reuters said recent dollar strength is temporary, and the currency will weaken over the course of the year amid an improving global economy and expectations the Fed will stop hiking interest rates well ahead of the European Central Bank. The dollar eased 0.15% to 136.575 yen , after climbing to 137.10 overnight, the highest since Dec. 20. For the week, the dollar is just slightly above flat, but any gain would preserve its win streak since mid-January. The euro rose 0.08% to $1.0606, after climbing off a nearly two-month low of $1.0533 at the start of the week.

☆ Ex-BOJ gov Shirakawa urges re-examination of monetary framework, inflation targets
▼ + stars: | 2023-03-02 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

TOKYO, March 2 (Reuters) - Former Bank of Japan (BOJ) Governor Masaaki Shirakawa called on policymakers to reconsider central banks' monetary framework based on inflation targets, given their limits that became apparent from the recent spike in prices seen in many countries. By allowing inflation to overshoot their targets, central banks "forgot the difficulty of taking away the monetary punch bowl" and failed to tighten policy soon enough, he said. "Inflation targeting itself was an innovation that came about in response to the severe stagflation of the 1970s and early 1980s. "Now that we know its limitations, the time is ripe to reconsider the intellectual foundation on which we have relied for the past 30 years and renew our framework for monetary policy," he added. Shirakawa, who was BOJ governor before incumbent Haruhiko Kuroda, also criticised the central bank's current forward guidance committing to keep interest rates ultra-low.

Rather, it must come up with ideas" to mitigate the costs and help sustain stimulus, Uchida told an upper house confirmation hearing. The remarks follow those of incoming BOJ Governor Kazuo Ueda on Monday suggesting his preference to spend "plenty of time" if the central bank were to conduct a review of its policy framework. While stressing that it was premature to discuss an exit strategy from ultra-loose monetary policy, Uchida said any exit would involve adjustments in the BOJ's interest rate targets and the level of its balance sheet. "In what order and at what timing the BOJ will make these adjustments will depend on economic and financial developments at the time," Uchida said. The BOJ can tap its experience conducting ultra-loose policy and dealing with market forces, to ensure it can steer a smooth exit regardless of economic conditions at the time, he said.

TOKYO, Feb 28 (Reuters) - Incoming Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said on Tuesday the central bank shouldn't modify its ultra-easy monetary policy just to address the side-effects of prolonged stimulus. It shouldn't modify easy policy just because there are side-effects. Rather, it must come up with ideas" to mitigate the costs and help sustain stimulus, Uchida told an upper house confirmation hearing. The remark follows that of incoming BOJ Governor Kazuo Ueda on Monday suggesting his preference to spend "plenty of time" if the central bank were to conduct a review of its policy framework. Markets are rife with speculation the BOJ will overhaul its bond yield control policy once Ueda succeeds incumbent Governor Haruhiko Kuroda, whose term ends in April.

☆ BOJ's Kuroda says he is resolved to keep ultra-loose policy
▼ + stars: | 2023-02-25 | by ( ) www.reuters.com time to read: +1 min

Feb 25 (Reuters) - Bank of Japan (BOJ) Governor Haruhiko Kuroda on Saturday stressed anew the central bank's resolve to maintain ultra-loose monetary policy, even as inflation continued to exceed its 2% target. Japan's core consumer inflation hit a fresh 41-year high of 4.2% in January, data showed on Friday, keeping the central bank under pressure to phase out its massive stimulus programme. "The rise in consumer inflation is driven mostly by moves by companies to pass on rising raw material costs to households," Kuroda told a news conference after attending the G20 finance leaders' gathering in Bengaluru, India. The BOJ expects core consumer inflation to slow below 2% in both fiscal 2023 and 2024, as the effect of past rises in raw material costs fades, he said. The BOJ must maintain current ultra-loose policy to sustainably and stably achieve its 2% target," Kuroda said.

☆ Morning Bid: Kuroda 2.0
▼ + stars: | 2023-02-24 | by ( ) www.reuters.com time to read: +2 min

[1/2] The Japanese government's nominee for the Bank of Japan (BOJ) Governor Kazuo Ueda arrives for a hearing session at the lower house of the parliament in Tokyo, Japan, February 24, 2023. Interest rate markets are positioned for an end to yield curve control as a first step away from decades of super-easy policy experiments in Japan. Yet as he fronted his confirmation hearing before parliament on Friday, he sounded very much like incumbent Haruhiko Kuroda. Traders responded with relief and the Nikkei share average (.N225) had its best session in a month. A surprise could shake things up, though with U.S. rate expectations already ratcheting higher through February a degree of stickiness is priced in.

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