If the BoJ sees its current bond buying as unsustainable, it may abandon the base money target and shift to an explicit interest rate policy. Central banks themselves are now questioning their own policies which, at the very least, presages a volatile trading environment in the coming weeks and months.
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Brainard said she wanted to see a stronger trend in US consumer spending and evidence of rising inflation before the Fed raises rates, and that the United States still looked vulnerable to economic weakness overseas.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent, but was headed for a loss of 2.2 per cent for the week. The Nikkei index gained 0.4 percent to 16,473.47 in midmorning trade.
In the mining space, BHP Billiton is advancing 0.6 percent, Rio Tinto is rising 0.7 percent and Fortescue Metals is higher by nearly 2 percent.
The broad-based S&P 500 climbed 1.0 percent, while the tech-rich Nasdaq powered 1.5 percent higher.
Even Brainard’s dovish speech on Monday failed to assuage market concerns.
LONDON, Sept 16 The dollar was on course to fall for a second week against the yen on Friday after US retail sales data quelled lingering bets on the Federal Reserve raising interest rates next week, while faith in Bank of Japan action against its currency also seems limited. The EUR/JPY is down at 115.1277 Yen, down 0.05%.
South Korean, Chinese, Taiwanese and Hong Kong markets are closed for holidays.
Elsewhere, the Australian dollar was steady at US$0.7513 after posting a 0.7 per cent gain yesterday.
The WSJ Dollar Index BUXX, -0.03% a measure of the dollar against a basket of major currencies, was up 0.01% at 86.53. Bond yields and prices move in opposite directions, and smaller regional banks and others that have bought up JGBs in tune with the BOJ are apparently selling them. However, data in recent weeks have shown signs of weakness, including the ISM surveys showing a decline in new orders and production in US factories in August and service sector activity at a six and a half year low. West Texas Intermediate rose 29 cents to 45.19 and Brent added 19 cents to 47.29.
Wells Fargo Bank fell again, by 0.8 percent, amid reports that Federal prosecutors have begun a probe into the its bogus accounts scandal.
Spot gold fell to a two-week low, trading down 0.7 per cent to $US1,313.31 an ounce.
Traders’ expectations of a rate hike from the Fed at its meeting next week rose slightly to 15 percent from 12 percent on Thursday, according to CME Group’s FedWatch program.
In the banking space, Mitsubishi UFJ Financial is higher by more than 1 percent. Industrial metal nickel CMNI3 was looking at a 6 percent weekly drop whereas copper CMCU3 was set to log its largest weekly rise in two months.
Wall Street also benefited from a 3.4 percent jump in Apple AAPL.O shares, after the company said that the first batch of its new iPhone 7 Plus sold out globally.
USA consumer prices increased more than expected in August as rising rents and health care costs offset a drop in gasoline prices, pointing to a steady build-up of inflation that could allow the Federal Reserve to raise interest rates this year.
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Japanese 10-year yields, meanwhile, as discussed in my column last week, have risen nearly 30 basis points since late July and are now almost in positive territory.
