BOJ expands ETF purchases, interest rates steady

The BOJ kept its pledge to increase the monetary base at an annual pace of about 80 trillion yen at its July 2016 meeting. Interest rate is also left unchanged at - 0.1 percent. Economists had expected a reduction to -0.2%.

“Against the backdrop of the United Kingdom’s vote to leave the European Union and the slowdown in emerging economies, uncertainties surrounding overseas economies have increased and volatile developments have continued in the global financial markets,” the BOJ said in its official statement.

Excerpts from the Statement by the Bank of Japan:

The bank of Japan believes that these monetary policy measures and the government's initiative will produce synergy effects on the economy.

The bank will continue with "QQE with a Negative Interest Rate", aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine the risks to economic activity and prices, and take additional easing measures in terms of threee dimensions -- quantity, quality and the interest rate -- if it is judged mecessary for achieving the price stability target.

Due to considerable uncertainty over the outlook for prices against the background of uncertainties surrounding global financial markets, the bank will conduct a comprehensive assessment of the developments in economic activity and prices under "QQE and QQE with a Negative Interest Rate" as well as these policy effects at the next Monetary Policy Meeting.

In a separate release on a quarterly review of its long-term economic projections, the Bank of Japan slashed the country's real GDP for 2016 to 1.0 percent from an earlier projection made in April of 1.2 percent. Core consumer prices forecasts were also cut to 0.1 percent from 0.5 percent. made in April.

Market Snapshot



Equity Markets: Top performers: Belgium, Germany, Italy. Worst performers: France, South Africa, United Kingdom

Opening Wrap: The broader Topix rose 0.1 percent to 1,308.50 and the JPX-Nikkei Index 400 was flat at 11,755.19. The Australian index, S&P/ASX 200, declined 0.14 percent. The Shanghai Composite Index eased 0.07 percent, while Hong Kong's Hang Seng Index was last down 0.82 percent. The S&P 500 gained 0.16 percent to 2,170.06 and the Nasdaq Composite added 0.3 percent to 5,154.98.

Currency Markets : Top performers: NZD/USD, NZD/CAD, GBP/USD. Worst performers: AUD/JPY, CAD/JPY, USD/JPY

Opening Wrap: The dollar last traded at 103.35 yen, down 1.8 percent on the day. The euro stood little changed at $1.1084. It is up almost 1 percent this week, but poised for a 0.2 percent loss in July. The sterling traded at 1.3188, up 0.18 percent. The Australian dollar traded at $0.7540, up 0.49 percent. The dollar index  fell 0.36 percent to 96.34.

Commodities Markets: Top performers: Rough Rice, Platinum, Soybean Oil. Worst performers: Gasoline, Copper, Cotton.

Opening Wrap: International Brent crude oil futures were trading at $42.78, up 8 cents from their previous close. U.S. West Texas Intermediate crude was at $41.16, up 2 cents. Spot gold was up 0.4 percent at $1,341.16 an ounce. Silver was up 0.3 percent at $20.21 an ounce and was heading towards a second straight monthly gain, having risen over 8 percent in July. Palladium, rose 0.9 percent at $701.65 an ounce, after touching its highest since October 2015 in the previous session. Platinum rose 1.2 percent at $1,140.50 an ounce.

Treasuries: Top performers: Euro Schatz US T-Note 2 Year. Worst performers: Euro Buxi, US T-Bond.

Opening Wrap: The 10-year JGB yield added 10 basis points to minus 0.180 percent, while September 10-year futures skidded 1.34 points to 152.46. The five-year yield added 10 basis points to a one-month high of minus 0.260 percent.