An overview of the coming day in Asian markets.
Investors divert their attention from Washington on Friday, for the first time since the inauguration of President Donald Trump on Monday, to Tokyo and the Bank of Japan, which is largely expected that it notes its interest rates to a 17 years old, at 0.5 %.
Assuming that the BOJ actually identifies the rates of a quarter of a percentage point – a certainty of 95 %, according to market prices – this attention will be tightened even more on the press conference of Governor Kazuo Ueda and the signals than He sends to future steps in politics.
The ideal scenario for asset prices in Japan and beyond would probably be a “DOVISH increase”, with Ueda more inclined to cool rather than to supply investors’ expectations regarding the pace of the pursuit of tightening, even if growth Salaries accelerates.
The Japanese monetary markets are prudent and only provide 25 additional point of tightening basis this year after the expected increase on Friday.
Even if we put aside the historical scars of BOJ and institutional anxiety when it comes to raising the rates, Ueda itself has adopted a measured tone in its recent public remarks, especially on December 25 and A week earlier at its press conference after the BOJ maintained its rates.
The appeasement of stock markets and bonds is not without risk – it could inject unwanted volatility on the currency markets, pushing the yen to descend to the 160.00 area for a dollar and to the area of danger of intervention.
Ueda’s Dovish position after the Boj’s December meeting dropped the yen at 158 for a dollar, its lowest level since July. A lower exchange rate could give a boost to the Japanese stock market, but the yen is dangerously close to its lowest historic levels and the Minister of Finance, Katsunobu Kato, as well as other officials have recently warned Speculative sales.
-Of course, a rapid appreciation of the yen is not in the interest of anyone either. It is often associated with larger turbulence on the markets and can trigger them. Japan is the largest creditor in the world, with some $ 3,300 billion in net foreign assets, and the risk that Japanese repatriation flows are quickly transformed into a torrent is a problem to which the authorities will be very attentive.
While events in Japan are leading the agenda on Friday – Japan also publishes inflation figures – Mr. Trump continues to make headlines, emphasizing the drop in world interest rates and prices Thursday oil. He also said that he expected the Fed listening to her and that he would plan to talk to the president of the Fed, Jerome Powell, on this subject.
His comments cut the grass under the foot of the dollar and petroleum, and brought the S&P 500 to a record fence level. They also allowed American bond yields to move away from their highest levels, but concerns about budgetary prospects continue to weigh heavily on treasury bills.
Here are the main developments that could guide the markets on Friday:
– Decision on interest rates in Japan
– PMI Australia, India (January)
– Pib de taïwan (T4)
