Yen Drops as BoJ Maintains Loose Policy

The Bank of Japan has left its negative interest rate and all aspects of its ultra-loose monetary policy unchanged at today’s policy meeting, sending the Yen lower.

1. The Bank of Japan has completed its latest policy meeting, deciding to leave its negative interest rate and forward guidance completely unchanged. There was speculation the Bank would begin to talk about moving towards a policy change, but this was not met. The market reacted by selling the Japanese Yen
2. The Reserve Bank of Australia released the minutes of its most recent policy meeting, which contained no surprises, and barely affected the Australian Dollar. Members saw encouraging signs of progress on inflation and determined to leave rates on hold.
3. Asian stock markets remain mixed, but major US indices continue to advance after closing at 2-year weekly closing highs on Friday. The price of the NASDAQ 100 Index is very close to an all-time high and the benchmark S&P 500 Index is very near a new 2-year high price.
4. Crude Oil has continued to rise strongly after trading at a new 6-month low price, reaching a new 2-week high, due to attacks on shipping in the Red Sea by Houthi forces which have pushed major shipping companies to refuse to transit goods through the Red Sea. The USA is stating that it will put together a military operation to fully reopen the Red Sea to shipping traffic, which may temper this rise.
5. In the Forex market, since the Tokyo open, the New Zealand Dollar has been the strongest major currency, while the Japanese Yen has been the weakest, putting the NZD/JPY currency cross in focus. There do not seem to be any valid long-term trends to exploit in this asset class right now, although with the US Dollar weakening again last week, eyes will be on EUR/USD to the long side if we get a daily close above the key resistance level at $1.1008..
6. Bitcoin seems to have found support at the level of $40,907, but the rise from that level is starting to look weak.
7. Cocoa futures closed higher yesterday and remain within a valid and very strong long-term uptrend.