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Yen Weakens as Bank of Japan Ends Negative Rates Era, Australian Dollar Softens

4 weeks ago

The yen experienced a decline following the Bank of Japan’s announcement that it would persist in buying government bonds, despite ceasing the world’s last remaining negative rates policy and abandoning other unconventional measures, including yield curve control.

Simultaneously, the Australian dollar appeared poised to reach its lowest level in approximately two weeks, while Australia’s stock market continued its upward trajectory. This surge occurred after the Reserve Bank of Australia opted to maintain policy rates at a 12-year peak, amidst indications of further economic deceleration and a rising trend in unemployment.

Contrarily, futures contracts for US equities indicated impending losses, following Monday’s resurgence on Wall Street. The market rebounded ahead of a series of pivotal central bank decisions expected this week, spanning from the US to the UK. With central banks dictating policy for nearly half of the global economy, investors are eagerly awaiting insights into the Federal Reserve’s stance on easing. This week marks the most significant cluster of policy decisions for 2024 thus far, encompassing assessments of borrowing costs for six of the top ten most-traded currencies.

In other sectors, oil prices sustained their gains, with attention focused on the ramifications of Ukrainian drone attacks on Russian refineries and ongoing OPEC+ supply cuts. Meanwhile, gold exhibited stability after a previous session’s uptick.

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