The market is still digesting the BOJ policy decision from earlier with the yen being knocked down by over 2% across the board while bonds are more bid in the aftermath. The central bank doubled down on defending their yield curve control policy and that has seen 10-year JGB yields fall to 0.41%. The move has reverberated with 10-year Treasury yields also seen down 6 bps to 3.494% currently.
Kuroda’s press conference will be up in the next half-hour, but I would expect him to reaffirm their current policy stance if anything else. However, so long as inflation data in Japan keeps coming in higher and there are growing leaks in the Japanese media of a change in thinking by local authorities, that will surely keep speculative bets alive.
Looking ahead, UK inflation will be a key focus on the economic calendar as it is estimated to still remain above double-digits. That said, the annual readings are expected to be a touch softer than in November – even if the monthly readings are to show another increase. Eurozone inflation is also on the agenda but this is just the final reading to the preliminary estimate here.
0700 GMT – UK December CPI figures
1000 GMT – Eurozone December final CPI figures
1200 GMT – US MBA mortgage applications w.e. 13 January
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.