Breaking News

Yen plummets to five-week low after BoJ startled markets with negative rates

News Date: 29/1/2016 00:41:16
Update Date: 29/1/2016 00:48:49


Bank of Japan surprised the markets by adopting a negative rate policy on deposits held with it from other banks, a strategy championed by the European Central Bank. BoJ put the rates at -0.1%, in stark contrast with expectations of no-change.

The bold move came as the central bank tries to fend off deflationary pressures, after earlier bleak data showed household spending tumbling 4.4% y/y in December, while Core CPI rose only 0.1% y/y, far away from the bank's 2% target. Housing starts also disappointed, dropping 1.3% y/y, while preliminary industrial production data for December showed another stumble of 1.4% m/m.

The yen collapsed to a five-week low versus the dollar at 121.36, before paring some losses to trade at 120.28, still down a massive 1.24%. The Japanese currency also hit a month low versus the euro at 132.24, before trading lastly at 131.29, down 1.02% for the day. Yen plunged 1.33% against sterling to 172.83.

Japanese and Asian markets cheered the unexpected policy easing, with Nikkei jumping nearly two percent to a two-week high at 17,638. China's Shanghai Composite index climbed 2.0%, while Australian shares rose 0.60%. Hong Kong shares surged about 1.50%.

The Asian revival comes on the heels of gains on Wall Street, supported by strong earnings and stabilizing oil prices. Facebook shares soared 15.5% after smashing profits forecasts, while Alphabet (Google) rose a solid 4.28%. But not all was rosy however, with Amazon plunging 12% after missing profits expectations by a big margin.

The Dow Jones Industrial Average closed up 125 points, or 0.79% at 16,069. NASDAQ Composite added 38 points, or 0.86% to 4,506. S&P 500 index gained ten

Latest news

Corona virus infection in the United States of America reached its maximum, reaching two million, 840 thousand and 906 cases, according to the Centers for Disease Control yesterday, after it recorded
07-2020 06 00:36:17

After the long collapse, the American labor market is achieving some relative recovery, as the number of added jobs yesterday reached 4,800 million jobs, which exceeded all expectations, and came as
07-2020 03 00:34:55

Beginning with the latest developments in commodities, the gold futures contracts started this morning with a rise of 0.70%, to be traded at 1784.56 dollars an ounce, after opening at 1771.61 dollar
07-2020 01 03:47:05

Oil prices continued to lose their losses after the recovery in demand decreased, due to the high number of injuries they suffer, and Brent crude fell by the same percentage 2%, which in turn pays to
06-2020 29 05:49:33

The US dollar concluded its research for the week, sticking to its gains, which means that the demand remains on the latter, and this is due to it being a safe haven in light of fears and concerns ab
06-2020 26 06:34:32

More News