In its policy meeting earlier, the Bank of Japan ended its negative interest rate policy and scrapped yield curve control, weakening the Japanese Yen.

1. In a widely expected move, the Bank of Japan has raised its interest rate for the first time since 2007 to end its negative interest rate policy, although the Bank continues to describe its approach as “accommodative”. Japan’s interest rate now stands between 0.0% and 0.1%. The Bank also ended its yield curve control policy. The Yen has weakened as a result, although attention now will be turning to Ueda’s upcoming speech as European markets start to come online. The main Japanese stock market index the Nikkei 225 has risen to trade above 40,000 and is not far from its all-time high made just a couple of weeks ago.
2. As expected, the Reserve Bank of Australia left its Policy Rate unchanged at 4.35% and made what is widely seen as a dovish tilt by removing language from its statement which suggested that a further rate hike could not be ruled out. The Australian Dollar has been notably weaker following this announcement.
3. In the Forex market, the US Dollar has been the strongest major currency since the Tokyo open today. The Japanese Yen has been the weakest. This puts the USD/JPY currency pair in focus, although its implied volatility for the coming year has dropped following the Bank of Japan’s earlier rate hike.
4. Bitcoin is looking bearish after making a new all-time high last Thursday just below $74,000. Trend traders may be considering exiting any long trades.
5. In the commodities market, Cocoa futures rose again yesterday to reach a new multi-year high before closing lower. Trend traders will be keen to be involved in this very long-running trend on the long side.
6. There will be a release of Canadian CPI (inflation) data later today which is expected to show a 0.6% increase over the past month.

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