Markets were shocked mid afternoon by the Bank of Japan’s interest rate meeting where a big pivot was in order, as the board moved its yield curve control program in a sudden change – just the thing in order before Xmas thin trading. This effective rate rise has caused a lot of volatility across a variety of markets with US Treasury yields spiking, Yen surging over 300 pips, and even Bitcoin having a mammoth round trip. The Australian dollar didn’t escape the carnage and tonight’s session on stock and currency markets looks to be a feisty one. Meanwhile oil prices were relatively stable with Brent crude holding just below the $80USD per barrel level while gold almost broke out again after pushing up towards the key $1800USD per ounce level on the BOJ announcement before rebuffed later on this afternoon:
Mainland Chinese share markets are selling off sharply again as we head into the close with the Shanghai Composite down over 1.4% to cross below the 3100 point level, currently at 3064 points while the Hang Seng Index is down over 2% to cross below the 19000 point level. Japanese stock markets were slammed by the BOJ pivot with the Nikkei 225 closing nearly 3% lower to 26439 points as the USDJPY pair lost over 400 – yes 400 pips – in a huge one off move as Yen appreciated considerably:
Australian stocks were the best in the region relatively speaking, with the ASX200 losing 1.5% to be almost pushed down to the 7000 point level, finishing at 7024 points. The Australian dollar was looking to move higher at first, but was also slammed hard as the RBA now has another central bank to catchup too, heading straight down to a new weekly low just above the 66 handle against USD:
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