Bank of Japan Left Interest Rate Unchanged

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From Trading Economics: The Bank of Japan left the interest rate unchanged at -0.1 percent at its September 2016 meeting but said it would introduce yield curve control to hasten its fight against deflation. Interest Rate in Japan averaged 2.96 percent from 1972 until 2016, reaching an all time high of 9 percent in December of 1973 and a record low of -0.10 percent in January of 2016. Interest Rate in Japan is reported by the Bank of Japan.

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In Asian Equity Markets Japanese stocks rallied and the yen weakened in a volatile session on Wednesday after the Bank of Japan decided to adopt a target for long-term interest rates in an overhaul of its massive monetary stimulus programme. The Nikkei swerved in and out of the red soon after the BOJ policy decision was announced and was last up more than 1 percent, while the Topix gained 1.7 percent after the central bank said 2.7 trillion of its ETF purchases will be linked to the index. The MSCI's broadest index of Asia-Pacific stocks outside Japan extending its gains to be up 0.35 percent on the day. Chinese stocks were barely changed with the Shanghai Composite Index up 0.05 percent and Hong Kong's Hang Seng Index down 0.12 percent.

In Currency Markets the yen weakened against the dollar and euro on Wednesday after the Bank of Japan altered its policy framework, and investors bought back the U.S. currency ahead of the outcome of the Federal Reserve's policy meeting later in the session. The dollar was up 1 percent at 102.68 yen, after rising to a one-week high of 102.79.  The euro rose 0.7 percent to 114.25 yen after earlier falling as low as 112.50, its lowest since Aug. 16. Against the dollar, the European unit was down 0.2 percent at $1.1128. The British pound was down 0.2 percent at $1.2967 after skidding to $1.2946, its lowest since Aug. 16. The Australian dollar traded at $0.7546, down 0.13 percent. The dollar index rose 0.25 percent to 96.21 after the BoJ announcement.

In Commodities Markets oil prices climbed on Wednesday, supported by a reported draw in U.S. crude inventories and by firm import data from Japan. U.S. West Texas Intermediate crude futures were up 1.8 percent at $44.86 a barrel. International Brent crude futures were at $46.47 per barrel, up 1.3 percent, from their last close.  Gold prices edged lower on Wednesday as the dollar rose  after the Bank of Japan overhauled its stimulus programme, with investors turning their focus to the U.S. Federal Reserve's policy outcome on interest rates later in the day. Spot gold fell 0.3 percent to $1,311.43 an ounce and spot silver was down 0.9 percent at $19.09 an ounce. Platinum was mostly flat at $1,025.40, while palladium fell 0.6 percent to $676.90.

In US Equity Markets stocks  ended little changed on Tuesday as healthcare gains countered declines in energy shares, a day before highly anticipated outcomes of monetary policy meetings in the United States and Japan. The Dow Jones industrial average rose 0.05 percent, to 18,129.96, the S&P 500 gained 0.03 percent, to 2,139.76 and the Nasdaq Composite added 0.12 percent, to 5,241.35.Energy stocks were the worst performing group, falling 0.8 percent. Exxon fell 1.5 percent. Wells Fargo shares rose 1.2 percent after the bank's chief executive weathered criticism as he testified before a U.S. Senate panel. FedEx shares rose more than 1 percent in extended trading after the package delivery company reported results.

In Bond Markets Japanese government bond yields rose on Wednesday after the Bank of Japan surprised markets by saying it would aim to guide the 10-year bond yield to around zero percent as part of an overhaul of its policy framework. The benchmark 10-year JGB yield rose to as high as plus 0.005 percent, rising to a positive level for the first time since mid-March. The 20-year yield rose to as high as 0.450 percent and last stood at 0.405 percent, flat on the day.

Source: Institute of  Trading and Portfolio Management