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Japans overtime pay rose 1.2% year-on-year in November, up from 1.5% in the previous month.Japans November labor cash income rose 0.5% year-on-year, below the expected 2.30% and the previous figure revised from 2.60% to 2.50%.1. The three major U.S. stock indexes closed mixed. The Dow Jones Industrial Average fell 0.94% to 48,996.08 points, the S&P 500 fell 0.34% to 6,920.93 points, and the Nasdaq Composite rose 0.16% to 23,584.27 points. Caterpillar fell more than 4%, and Nike fell more than 3%, leading the decline in the Dow Jones. The Wind U.S. Tech Big Seven Index rose 0.56%, with Google rising more than 2%, Microsoft rising more than 1%, and Intel rising more than 6%. Most Chinese concept stocks fell, with Melco Resorts & Entertainment falling more than 7% and Full Truck Alliance falling more than 7%. 2. European stock indices closed mixed. The German DAX rose 0.92% to 25,122.26 points, the French CAC40 fell 0.04% to 8,233.92 points, and the UK FTSE 100 fell 0.74% to 10,048.21 points. German stocks rose, benefiting from strong infrastructure investment and the industrial sector. French stocks were dragged down by declines in luxury goods stocks such as Kering and LVMH. UK stocks fell due to a pullback in energy and metal stocks, coupled with expectations that the Bank of England would maintain high interest rates. 3. US Treasury yields were mixed. The 2-year Treasury yield rose 1.45 basis points to 3.470%, the 3-year yield rose 0.28 basis points to 3.525%, the 5-year yield fell 0.52 basis points to 3.703%, the 10-year yield fell 2.16 basis points to 4.147%, and the 30-year yield fell 3.17 basis points to 4.829%. 4. The WTI crude oil futures contract closed down 1.28% at $56.4 per barrel; the Brent crude oil futures contract fell 0.51% to $60.39 per barrel. 5. International precious metals futures generally closed lower. COMEX gold futures fell 0.65% to $4467.1 per ounce, and COMEX silver futures fell 3.77% to $77.98 per ounce. 6. Most London base metals fell. LME tin rose 0.34% to $44650.0 per tonne, LME lead fell 0.60% to $2058.5 per tonne, LME aluminum fell 1.60% to $3083.5 per tonne, LME zinc fell 2.63% to $3160.0 per tonne, LME copper fell 2.93% to $12866.0 per tonne, and LME nickel fell 4.21% to $17655.0 per tonne.According to US financial media Semafor: US Treasury Secretary Bessant, US Commerce Secretary Lutnick, and US Energy Secretary Wright will attend the Davos World Economic Forum together with US President Trump.U.S. Republican Senator Lindsey Graham: Following my meeting with President Trump on Wednesday, I have approved the bipartisan Russia sanctions bill.

As the BoJ ponders a YCC expansion, EUR/JPY continues to decline, falling below 142.60

Alina Haynes

Apr 06, 2023 11:52

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After plunging below 142.60 during the Asian trading session, the EUR/JPY pair's three-day losing trend was extended. Renewed rumors of an expansion of the Bank of Japan's (BoJ) Yield Curve Control (YCC) are exerting immense pressure on the cross.

 

The Japanese economy is experiencing gradual wage growth, and inflation is expected to respond to recent increases in crude oil prices. Analysts at Wells Fargo believe the BoJ will take advantage of a tactical opportunity to further modify its policy settings in the fourth quarter of 2022, and are inclined toward a meeting in October. They added that this timeframe is optimal for a smooth policy adjustment, as monetary easing from the Federal Reserve (Fed) and other major central banks should alleviate yield pressure.

 

In particular, the Bank of Japan (BoJ) will raise the target yield for 10-year Japanese government bonds (JGBs) from 0% to 0.25% and increase the tolerance interval surrounding this target to +/- 75 basis points.

 

Accelerating PMIs in the Eurozone provide support for the European Central Bank's sustained rate hikes. (ECB). S&P Global reported a Composite PMI of 53.7 on Wednesday, which was higher than the previous release of 52.0 but below expectations of 54.1, the highest level in the past ten months.

 

According to Reuters, S&P Global issued the following statement: "Manufacturing production increased slightly, but the service sector had the greatest impact on March's accelerated growth."

 

Wednesday, ECB policymaker Boris Vuji stated regarding interest rate forecasts, "The majority of the rate-hiking cycle has passed." He added, "We may require additional rate increases to address core inflation."

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