Ian Reynolds
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Overnight
Economic Indicators Released Overnight
All eyes on the Bank of Japan overnight as they attempt to drive more liquidity in the JGB market despite them owning 50% of it and the other authorised buyers taking massive haircuts on their purchases.
Bank of Japan Statement on Monetary Policy [BoJ]
Key Policy Decisions
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Interest rate held steady: The BOJ maintained its short-term interest rate at 0.5%, unchanged for the third consecutive meeting
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Tapering bond purchases slowed:
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Through March 2026: Reduce quarterly JGB purchases by ¥400 billion.
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From April 2026 to March 2027: Slow taper to ¥200 billion per quarter, bringing monthly bond-buying to about ¥2 trillion by Q1 2027
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The BOJ will assess the tapering plan at its June 2026 meeting
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Governing Board Highlights
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Governor Ueda’s remarks:
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Emphasised flexibility in responding to any sudden rise in long-term interest rates—via increased bond purchases or operations against pooled collateral
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Stressed reliance on hard data for future policy decisions amid uncertain inflation and economic trends
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Flagged risks from U.S. tariffs, global trade tensions, and Middle East geopolitical developments affecting inflation and growth
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So Core CPI is 3.5% vs overnight cash rate at 0.5%.
Investors react to BOJ decision to stand pat on interest rates [Reuters]
Elsewhere improved business sentiment in Europe contrasted with a terrible US Retail Sales report and this morning Japan was back in the news where imports dropped 7.7% annualised in May.
Japan Trade Balance May 2025
US Equities
Breaking
Bitcoin
Price action negative for most of the day, along with other risk assets, but price held 102.5k and we're up at 105k again this morning.
Commodities
Silver consolidated and is now moving higher with a short term target at $38.40.
Bonds
Long Japanese bonds were stable after the BoJ announcement. 3% yield vs 3.5% Core CPI doesn't make much sense to investors.
Japan 30 Year Government Bond Yield Daily
Foreign Exchange
DXY looking perkier and back to resistance at 98.40. The downward momentum is fading.
Equities
Momentum fading on the S&P as the bounce from 5,800 is now trying to consolidate.
Interesting
Economic Indicators Today
