In global markets, the ‘soft landing’ scenario for the US economy continues to support the risk appetite.
MSCI’s Asia-Pacific index rose to its seventh trading day, capturing the longest streak since January. Stock markets of Japan, Australia and South Korea were influential in the rally.
Chinese stocks diverged negatively after Caixin manufacturing PMI data pointed to a contraction of 49.2. US stock futures are flat.
The Dollar Index is above 1,220 points, up 0.2 percent. The Australian dollar is the developed country currency that lost the most against the dollar this morning with 0.7 percent after the Reserve Bank of Australia kept the interest rate constant at 4.10 percent after a series of interest rate hikes. The 0.5 percent loss in the South African rand in emerging markets was also noteworthy. The US 10-year Treasury yield is flat at 3.95%.
Attention Bank of Japan
The new steps of the Bank of Japan (BOJ), which took the first step towards tightening and flexibility in yield curve control, may have a shocking effect on global markets, especially bond markets.
However, economists following the BOJ do not expect a new step this year. 90 percent of 41 economists surveyed by Bloomberg think that BOJ steps will be limited to the decisions taken last Friday.
While most economists do not expect rate tightening until beyond 2024, 26 percent of economists surveyed predicted that a tightening step could come in April 2024. According to 78 percent of economists, the next step will be to remove the yield curve control.
Japan’s tightening process is of great importance for global bond markets. About three trillion dollars of Japanese investment has been made in bonds abroad, and the possible tightening process could result in a return of these investments to Japan.