rose 0.8% to hit a new seven-month high and were headed for a third consecutive week of gains.fell 0.4% and the yen, which surged 2.7% against the dollar overnight, kept going and rose about 0.2% further to 128.65 per dollar. It is up 6% in little more than three weeks since the Bank of Japan stunned markets by widening the band around its 10-year bond yield target.
"The market is expecting at the next meeting that they will increase the band for the 10-year again," said Naka Matsuzawa, chief Japan macro strategist at Nomura, referring to the central bank's upcoming meeting running 17-18 January. The BOJ had described its December move as aimed at addressing distortions in the bond market, and defended the new target with bond purchases - but that is under immense pressure now as traders have a sniff of a shift at next weeks' meeting.
Investors responded by down-shifting expectations for U.S. interest rates. A Federal Reserve hike of 25 basis points rather than 50 next month is now nearly universally expected, and futures markets have priced in several rate cuts this year.
Election is over Inflation back to normal. Big Corp will wait till 2024 to rise prices again