AIRLINK 74.00 Decreased By ▼ -0.25 (-0.34%)
BOP 5.14 Increased By ▲ 0.09 (1.78%)
CNERGY 4.55 Increased By ▲ 0.13 (2.94%)
DFML 37.15 Increased By ▲ 1.31 (3.66%)
DGKC 89.90 Increased By ▲ 1.90 (2.16%)
FCCL 22.40 Increased By ▲ 0.20 (0.9%)
FFBL 33.03 Increased By ▲ 0.31 (0.95%)
FFL 9.75 Decreased By ▼ -0.04 (-0.41%)
GGL 10.75 Decreased By ▼ -0.05 (-0.46%)
HBL 115.50 Decreased By ▼ -0.40 (-0.35%)
HUBC 137.10 Increased By ▲ 1.26 (0.93%)
HUMNL 9.95 Increased By ▲ 0.11 (1.12%)
KEL 4.60 Decreased By ▼ -0.01 (-0.22%)
KOSM 4.83 Increased By ▲ 0.17 (3.65%)
MLCF 39.75 Decreased By ▼ -0.13 (-0.33%)
OGDC 138.20 Increased By ▲ 0.30 (0.22%)
PAEL 27.00 Increased By ▲ 0.57 (2.16%)
PIAA 24.24 Decreased By ▼ -2.04 (-7.76%)
PIBTL 6.74 Decreased By ▼ -0.02 (-0.3%)
PPL 123.62 Increased By ▲ 0.72 (0.59%)
PRL 27.40 Increased By ▲ 0.71 (2.66%)
PTC 13.90 Decreased By ▼ -0.10 (-0.71%)
SEARL 61.75 Increased By ▲ 3.05 (5.2%)
SNGP 70.15 Decreased By ▼ -0.25 (-0.36%)
SSGC 10.52 Increased By ▲ 0.16 (1.54%)
TELE 8.57 Increased By ▲ 0.01 (0.12%)
TPLP 11.10 Decreased By ▼ -0.28 (-2.46%)
TRG 64.02 Decreased By ▼ -0.21 (-0.33%)
UNITY 26.76 Increased By ▲ 0.71 (2.73%)
WTL 1.38 No Change ▼ 0.00 (0%)
BR100 7,874 Increased By 36.2 (0.46%)
BR30 25,599 Increased By 139.8 (0.55%)
KSE100 75,342 Increased By 411.7 (0.55%)
KSE30 24,214 Increased By 68.6 (0.28%)

TOKYO: The yen surged against the dollar on Tuesday after the Bank of Japan said it would review its yield curve control policy and widened the trading band for the 10-year government bond yield in an unexpected tweak.

While it kept broad policy settings unchanged - pinning short-term JGB yields at -0.1% and the 10-year yield around zero - it widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.

The dollar tumbled as much as 2.78% to 133.11 yen, a level last seen on Aug. 16, before last trading 2.62% weaker at 133.345. It had been slightly stronger at about 137.40 yen ahead of the policy announcement.

Eyes will now be trained on BOJ Governor Haruhiko Kuroda’s media briefing later in the day for additional hints about a pivot away from ultra-easy policy.

Most BOJ watchers had expected no changes until his 10-year term finishes at the end of March. “This was really out of the box,” said Bart Wakabayashi, branch manager at State Street in Tokyo.

“We’re seeing them start to test the market about the exit strategy,” he added. “It will depend on Kuroda’s comments later today, but we could see a break below 130.

It’s very much within reach this year.“ The 10-year JGB yield jumped to 0.46% from the previous cap at 0.25%. It pulled equivalent US Treasury yields higher as well, with the 10-year soaring to the highest this month at 3.711%.

The US dollar index sank though, dropping 0.31% to 104.30, bringing it back to the middle of its trading range this month of 103.44-105.90. The index measures the greenback against the yen and five other major peers, including the euro and sterling.

Yen rises on report of Japan govt move for more flexible inflation target

It had been moving toward the top of that range before the BOJ announcement as investors continued to digest the Federal Reserve’s message of higher interest rates for longer. The euro was flat at $1.0609, holding on to Monday’s 0.23% gain following an upbeat reading of German business morale.

Earlier that day, if had languished at the lowest since Dec. 13 at $1.05755. Sterling was also little changed at $1.21435, holding close to the previous session’s nearly two-week low of $1.2120.

New Zealand’s dollar dropped 0.6% to $0.6326 after a big decline in a survey of local business confidence.

The Australia dollar slumped 0.52% to $0.6664, and touched $0.6662 for the first time since Nov. 29.

Earlier, the Aussie had shrugged off minutes of the Reserve Bank of Australia’s Dec. 6 meeting that showed policymakers considered a half-point hike and a pause before opting for a quarter-point rate increase.

Those minutes reinforced the “uncertain outlook” for policy, providing an additional weight on the Australian dollar, said Sean Callow, a strategist at Westpac.

“Unease over China’s haphazard COVID policy changes also seems to be keeping a lid on AUD/USD,” Callow added.

Comments

Comments are closed.