by Chris Becker
So another central bank meeting passes and it all it took for Japanese stocks and the USDJPY to shoot higher was a rewording and switching of focus of stimulus from outright purchases to manipulating the yield curve. With long term bonds in the firing line, the cash went into short term risk, so the Nikkei 225 surged nearly 2% and almost back to its daily uptrend line:
Yen was sold off immediately, losing over 100 pips to USD and setting up for a potential reversal of a longterm downtrend:
The Shanghai Composite is still dicing with terminal support at 3000 points, barely moving for the day, while the ASX200 closed up nearly 0.8% higher reacting well to the BOJ short term moves. We’ll see if it can carry it through to the London session, where Eurostoxx futures are higher, up 0.7% while the S&P500 may finally move out of its funk, with futures up half a percent.
Turning to commodities, oil shot out of the gate on the back of the BOJ move, but also on more speculation that a productive freeze agreement is around the corner. The rectangle on the four hourly chart has been broken to the upside, with WTI through the $45USD per barrel level:
In other currencies, the Aussie dollar is still holding on to previous nights gains, currently at 75.60 just before the London session open were it needs to clear this level to have any hope of momentum going into the Fed meeting:
The data calendar ramps up with the start of the FOMC meeting tonight and the RBNZ meeting in the early hours of the morning.