AIA - BOJ Delivers Sending Greenback To Almost JPY150; Now Over To The Federal Reserve

2024-07-31 07:00:00 ET

Summary

• A 15 bps hike by the BOJ and plans to halve its bond purchases by the end of FY25, coupled with a hawkish press conference by Governor Ueda sent the dollar to nearly JPY150.
• The focus is now on the Federal Reserve, which is expected to signal that its confidence has grown that inflation is on its way back to the target and that it may be appropriate to reduce the restrictiveness soon.
• Nearly all the bourses in the Asia Pacific region but Taiwan rallied.

Overview

A 15 bps hike by the BOJ and plans to halve its bond purchases by the end of FY25 (in March 2026), coupled with a hawkish press conference by Governor Ueda sent the dollar to nearly JPY150, its lowest level in four months. A soft-core inflation reading in Australia send the Aussie lower and is the weakest of the G10 currencies. The others are little changed. The focus is now on the Federal Reserve, which is expected to signal that its confidence has grown that inflation is on its way back to the target and that it may be appropriate to reduce the restrictiveness soon. This will likely be understood as validating market expectations of a cut at the next meeting in September. A stronger endorsement by come at the Jackson Hole conference at the end of next month, when another employment and CPI report will be in hand....

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