BOJ press conference:
- USD/JPY extends gains as Ueda delivers more dovish messaging
- BOJ governor Ueda: Uncertainty stemming from trade policies have heightened sharply
- BOJ governor Ueda: Underlying inflation to cool down due to tariffs, slower global growth
- BOJ governor Ueda: Timing of next rate hike could be swayed a lot depending on tariffs
- BOJ governor Ueda: If the outlook changes, then we will need to adjust our policy
- BOJ governor Ueda says would expect US tariffs to be above the base 10% levied
Headlines:
- US futures continue to hold up in European morning trade
- No relief for oil as price continues to tumble lower
- The market sees more Fed rate cuts after the weak US GDP but it could be wrong
- US Bessent: Need to see de-escalation with China on tariffs
- US Treasury Secretary Bessent on the economy: We expect to see GDP revised
- UK March mortgage approvals 64.31k vs 64.80k expected
- UK April final manufacturing PMI 45.4 vs 44.0 prelim
- US April Challenger layoffs 105.44k vs 275.24k prior
Markets:
- USD leads, JPY lags on the day
- UK FTSE flat; S&P 500 futures up 1.1%
- US 10-year yields down 3.8 bps to 4.136%
- Gold down 2.5% to $3,203.53
- WTI crude down 2.2% to $56.92
- Bitcoin up 1.8% to $96,241
There wasn’t too much in European trading today amid a holiday in conjunction with Labor Day.
BOJ governor Ueda’s press conference at least helped to keep things a little interesting, as he delivered more dovish remarks on the economy and inflation. That is leading to markets thinking about a further pause on rates in June next, following the decision today.
USD/JPY nudged higher from 144.20 to 144.75 during the presser and is still largely holding gains, seen up 1% at 144.50 levels now.
Besides that, there wasn’t too much action in the FX space. The dollar is keeping steadier across the board, but mostly little changed against the other major currencies. EUR/USD is lightly down by 0.1% to 1.1320 but was hovering around 1.1300 at the tail end of Asia trading. Meanwhile, GBP/USD is flat at 1.3325 and USD/CAD just up slightly by 0.2% to 1.3823 currently.
In other markets, US futures are keeping higher after the late rebound from Wall Street yesterday. And the mood is helped by a jump up in tech shares after stronger earnings from Meta and Microsoft.
We had US Treasury secretary Bessent out with some remarks as well but nothing that is too meaningful, mainly just a repeat of what we’ve heard before. It’s now more about walking the walk, not talking the talk.
The bond market is also continuing to hold the calm, so that’s keeping the risk mood in a better spot to start the month.
In the commodities space, gold is pushed down as it breaks away from its recent consolidation. The $3,200 level is now eyed next amid the break from the short-term technical range over the past week or so.
Oil was a bit of a standout mover as it dipped down to a low of $56.40 as concerns continue to grow on multiple fronts on the oil market.
This article was written by Justin Low at www.forexlive.com.
