Japanese Yen fell down against the US dollar in Asian sessions on Tuesday after the Bank of Japan (BoJ) decided to keep monetary policy steady, while US stocks were mixed after Federal Reserve Chair Janet Yellen’s positive comments. BoJ kept its short-term target rate unchanged at -0.1%, and repeated its will to keep the 10-year government bond yield around 0%, while offering a more upbeat view of the economy than in its Nov. 1 assessment. It will continue to purchase government bonds at the previous pace of 80 trillion Yen a year.
Furthermore, the Central Bank added that “Japan’s economy is likely to turn to a moderate expansion” with a rising domestic demand large scale fiscal stimulus and growing exports. But BoJ warned that the impact of US monetary policy on global markets was one of the risks to the outlook, suggesting that the Federal Reserve’s interest rate hike cycle could disrupt emerging market capital flows.
Meanwhile, the Stoxx Europe 600 Index rose to 0.4% (the highest since December 2015) as tensions eased after the assassination of Russia’s ambassador to Turkey. Topix Index added 0.2% and Japan’s Nikkei, flat before the BoJ decision ending the day up 0.5%. As for the Chinese stocks, they retreated to a six-week low. The greenback also rose 12% against the Yen since Donald Trump’s presidential election. China’s CSI 300 index slid 0.6%, as Beijing’s move to tighten the supervision of shadow banking activities and persistent liquidity concerns restrained risk appetite. Hong Kong stocks dropped 0.5%. Wall Street ended higher on Monday, albeit below the sessions’ highs, as optimism took over Yellens’ comments about the US labor market.
Still, international markets were rattled on Monday evening after a truck plowed into a crowded Christmas market, in central Berlin, which is suspected to be a terrorist attack that killed 12 people and injured 48 others. Pressure also came on the Euro after the assassination of Russia’s ambassador to Turkey, pushing Turkish lira to decline by 0.6% against the Dollar. It slumped to as low as 62.0907 per Dollar on Monday but recovered to end the day up 0.3% at 61.8475.
In other news, a man in Switzerland opened fire into a Zurich mosque on Monday evening too, injuring three people. The safe haven Swiss franc remained however resilient, holding steady at 1.068 per Euro, following a 0.4% gain.
Aussie Dollar rose against the US Dollar on Tuesday following the release of the Reserve Bank of Australia’s (RBA) latest set of policy-meeting minutes, showing that it was cautiously optimistic on the economy, and that it was trying to balance the benefits of lower interest rates against the risk of higher household .