Global Market – U.S. Fed meeting outcome & BOJ Policy outcome
This week we will discuss U.S. Fed meeting & Bank of Japan policy outcome. U.S. Fed increase rate by 25-bps to 5.25% to 5.50% is highest in 22 years and further tightening not ruled out. Bank of Japan continue to maintain ultra-low interest policy and continue with its QE and manage JGB yield between -0.50% to 0.50%.
U.S. Fed hike rate to 22-year high, keeps door open for further rate hike
The Federal Reserve resumed raising interest rates and Chair Jerome Powell left open the possibility of further hikes, which he emphasized will depend on incoming data that has recently signaled a resilient US economy.
Bank of Japan policy decision outcome
The key move that jolted markets was the BOJ’s switch to a more flexible approach on bond buying. The bank turned its heavily defended yield cap into little more than a yardstick. The BOJ will now allow movements beyond 0.5%, further diluting the meaning of a 0% target aimed at stimulating the economy and prices.
Equichain Wealth Advisors: Market View & Opinion
Global market continues to focus on U.S. Fed and BOJ which are currently adopting contrarian policy approach. U.S. Fed continue to raise rates and keep door open for further rate hike while BOJ keeps rate ultra-low and but however, they may allow JGB yield to move up to 1%.
We would continue to focus where we see risk arising out of tight monitory policy. Globally inflation seen softening. Global monitory policy shift to downward trajectory will provide fresh trigger to risk-on sentiment whereas further tightening would lead to risk-off.