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The yen clobbered its major counterparts on speculations that the BOJ will ease the pedal from the metal as early as next month. Meanwhile, the dollar continued to slide on Trump’s anti-dollar remarks.

  • No major economic releases
  • Rumors over BOJ’s potential policy tweaks dominate market discussions

Major Events/Reports:

BOJ ago tweak its policies?

The yen was on fire in today’s Asian session, as market players price in rumors that Bank of Japan (BOJ) members are considering tweaks to the central bank’s monetary policies.

Over the weekend Reuters cited “people familiar with the central bank’s thinking” and said that the BOJ is in “unusually active discussions” that could lead to changes to the pace of its stock-buying and even interest rate targets.

Reuters cautioned that discussions will still depend on inflation forecasts from BOJ members, which is expected to see downgrades after last week’s release reflected just a 0.2% consumer price increase (the BOJ is targeting a 2.0% growth).

BOJ Governor Kuroda has denied knowledge of said discussions and the BOJ offered to buy an unlimited number of fixed-rate bonds for the first time since February, but the rumors were enough to start speculations that the central bank would adjust its monetary easing to reflect a “more sustainable” pace in a long-term battle against low inflation.

Mixed market reactions

Nikkei took heavy hits on currency war concerns and a higher yen, while other Asian bourses took a chill pill and registered more subdued volatility.

  • Nikkei is down by 1.35% to 22,391.2
  • A SX 200 is down by 0.64% to 6,228.2
  • Shanghai index is up by 0.37% to 2,839.826
  • Hang Seng is up by 0.15% to 28,266.2

Gold benefited from the dollar’s selloff, while crude oil shrugged off the bad vibes and edged a bit higher across the board.

  • Gold is up by 0.07% to $1,232.32
  • Brent crude oil is up by 0.03% to $72.95
  • U.S. WTI is up by 0.04% to $68.14

Major Market Mover(s):

JPY

The BOJ offering to buy unlimited amount of fixed-rate bonds for the first time since February was not enough to sway yen bulls from attacking.

USD/JPY is down by 53 pips (-0.48%) to 110.89; EUR/JPY is down by 40 pips (-0.31%) to 130.20; GBP/JPY is down by 49 pips (-0.33%) to 145.81; AUD/JPY is down by 30 pips (-0.36%) to 82.37, and CHF/JPY is down by 27 pips (-0.24%) to 111.94.

USD

The Greenback continued to feel the pain of the POTUS accusing China and the EU of “currency manipulation” a few days ago.

EUR/USD is up by 23 pips (+0.20%) to 1.1742; GBP/USD is up by 22 pips (+0.17%) to 1.3149; AUD/USD is up by 10 pips (+0.13%) to .7438, and USD/CHF is down by 16 pips (-0.16%) to .9906.

Watch Out For:

  • 10:00 am GMT: German Bundesbank report