The BoJ forecast growth to come in at 1.2 percent in the fiscal year to March 2016, down from an earlier 1.7 percent projection. All of this is good for the dollar but the bigger question is whether commodity prices are in overshoot and set to stabilise, or still set for another significant leg lower as global growth slows.
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Copper touches new 3-week low as oversupply weighs. However, with deflationary pressures strong in the “old” economy and the “new” economy still suffering from the bursting of the stock market bubble, more monetary support is likely forthcoming. That would be its best month since July 2009.
OPEC oil output falls 120,000 bpd in October – survey. Government bond yields also slipped back after two days of Fed-fuelled increases. The dollar had climbed against other currencies on Wednesday as traders anticipated that higher rates were on the way.
The Bank of Japan will announce its decision on interest rates and release its policy statement as well as its semi-annual outlook report. Fed Chair Janet Yellen has previously said she wants to start raising rates this year. It leaves investors with less than 12 hours to speculate on what the USA central bank may or may not say before it actually says it. The conjecture largely centers on whether the Fed will retain its confidence in a 2015 rate hike given investors have all but written off the chances of a move tomorrow.
The USA dollar was down 0.1 per cent against the yen at 120.99 yen, but up about 0.9 per cent for the month against the backdrop of divergent monetary policy expectations.
In the statements issued on Wednesday, the FOMC said it would assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation “in determining whether it will be appropriate to raise the [federal funds rate or FFR] target range at its next meeting”. It has made session high at 1.3083 and lows at 1.3053 levels.
The dollar rose for a second straight month in October, indicating the currency’s rally has resumed after seven long months of sideways trading.
Indeed, S&P 500 e-mini futures edged down about 0.3 percent.
In the banking space, Mitsubishi UFJ Financial (MTU) is adding 0.3 percent and Mizuho Financial Group (MFG) is up 0.4 percent, while Sumitomo Mitsui Financial is down 0.5 percent. Hong Kong’s Hang Seng was down 0.2 percent at 22,775.25 while South Korea’s Kospi was little changed at 2,034.74.
US stock indexes finished with their strongest monthly performances in four years on Friday, even as they dipped for the day amid a mixed bag of earnings reports.
Britain’s FTSE lost 0.9 percent to 6,381.23 and France’s CAC 40 shed 0.6 percent to 4,861.38.
By contrast, the yield on corporate notes globally has increased 26 basis points to 2.92 percent.
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Brent, the global benchmark for oil, rose 92 cents to $49.72 a barrel. The Commerce Department said the economy cooled off in the summer, estimating gross domestic product grew 1.5 percent, a bit less than analysts had forecast.
