It does not matter the Bank of Japan will raise rates to a 30-year high. It also unlikely to cause a violent unwiding of the carry trade as was the case in August 2024? Why? First of all, Friday's 25-bp hike in the overnight rate to 0.75% is widely anticipated and will not be a surprise as in August 2024. Also remember, we had a rate hike in January, which was harmless in scale and in anticipation. Secondly, stock markets are well below their highs, meaning they're not at their peaks as was the case in August 2024, when they were vulnerable to any pricking from the Japanese needle. BoJ Governor Ueda, shall temper market fears, by indicating that the new 0.75% rate is well below the neutral rate, which is around 1.0%. This means 0.75% is not at all hawkish. If anything, it remains too low. Once Ueda asserts this point, while assuring no rush in future rate hikes --markets are likely to take it in stride. TIMINGS: BoJ announcements are usually between 3-4 am GMT, followed by the important press conference around 4.5 hrs later.
Read More...Today's weaker than expected UK CPI sharply boosted EURGBP and dragged down GBPUSD on improved expectations the BoE will cut rates tomorrow (Thursday). Take a look below how EURGBP could hit 0.8920 in the nex few days. We also set up up our Whatsapp Bdcst Group for a EURUSD trade setup pre-ECB & US CPI. هبوط حاد في الجنيه الإسترليني مقابل الدولار الأمريكي واليورو بعد أن جاء التضخم في المملكة المتحدة أقل بكثير من المتوقع، مما يؤكد خفض سعر الفائدة غدآ الخميس
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