The yen experienced a decline following the Bank of Japan's (BOJ) decision to terminate its negative interest-rate policy, the last of its kind globally. Despite this change, the BOJ assured that financial conditions would remain accommodating.
The BOJ's rate increase, its first in 17 years, was anticipated by many. Governor Kazuo Ueda maintained a neutral stance, acknowledging the possibility of not achieving the inflation target. The central bank ended its yield curve control program but committed to continuing purchases of long-term government bonds.
This policy shift led to gains in Japanese bonds and the Topix index reaching its highest point since 1990. Conversely, the yen weakened against the dollar, dropping 0.9% to 150.55. With several central banks scheduled to meet this week, all eyes are now on the Federal Reserve's upcoming decision.
Market analysts describe the BOJ's move as an extremely cautious rate hike. Meanwhile, the dollar strengthened, and U.S. futures indicated a potential pullback on Wall Street, influenced by Nvidia Corp.'s recent performance and Super Micro Computer Inc.'s share offering announcement.
Investor focus is also on the Federal Reserve's projections and the potential for fewer rate cuts than the market currently anticipates. Additionally, investor confidence in Germany has surged, buoyed by expectations of upcoming rate cuts by the European Central Bank (ECB).
Bitcoin and other cryptocurrencies saw a decline, impacted by a significant outflow from the largest exchange-traded fund for Bitcoin. This also affected cryptocurrency-related companies like Coinbase Global and Marathon Digital.
Corporate highlights include AstraZeneca's acquisition of Fusion Pharmaceuticals, Unilever's plan to separate its ice cream business, Nvidia's unveiling of a new AI processor, and discussions between Thyssenkrupp and Carlyle Group regarding a potential sale.
Key events to watch this week include speeches by ECB officials, U.S. housing starts, the Fed's rate decision, and earnings reports from Nike and FedEx.
Market movements show a slight decline in the Stoxx Europe 600 and U.S. futures, while the Bloomberg Dollar Spot Index rose. Cryptocurrencies like Bitcoin and Ether experienced significant drops, and commodity prices, including Brent crude and gold, saw minor changes.
Related Stock Tickers:
