S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico MarketDespite the Bank of Japan (BoJ) revising up growth and inflation forecasts, political and fiscal risks are dominating yen dynamics and muting the usual USD/JPY response, ING’s FX analyst Chris Turner notes.
Japan politics overshadow monetary policy signals
“On another day, today’s Bank of Japan meeting might have sent USD/JPY a little lower. Growth and inflation forecasts were revised up and the BoJ seemed to be showing concerns about potential labour shortages and what it could mean for wages.”
“However, the political/fiscal story is dominating in Japan. Were PM Sanae Takaichi to prove successful in securing an LDP majority in elections on 8 February, JGB yields would rise again and the yen would be hit on fiscal concerns.”
“We’ve got a slightly bullish USD/JPY bias into that election event risk – especially should US activity data continue to perform well.”
