(Bloomberg) — The yen fell after the Bank of Japan brought an end to the world’s last negative interest-rate policy and emphasized that financial conditions will remain easy.
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The BOJ’s first hike in 17 years had been widely expected and Governor Kazuo Ueda struck a neutral tone at a news conference, saying there’s still a chance its inflation goal will not be hit. While the central bank scrapped its yield curve control program, it also pledged to keep buying long-term government debt.
Japanese bonds gained and the Topix closed at the highest since 1990. The yen slid 0.9% versus the dollar to 150.43. In a busy week for central bank decisions, attention now shifts to the Federal Reserve’s meeting on Wednesday.
“It’s a very, very dovish hike, as dovish hike as they come,” said Frederic Neumann, HSBC’s chief Asia economist, said on Bloomberg Television.
The dollar strengthened and Treasuries were little changed. European shares declined and US futures pointed to a retreat on Wall Street after Monday’s tech-driven bounce.
Read More: Trading Floors Buzz With Excitement as BOJ Axes Negative Rates
Investors will be focused on the US central bank’s projections — the dot plot — to gauge how many rate cuts policymakers are expecting to deliver this year.
“We are now thinking perhaps we get slightly higher dots — could we see fewer cuts being priced in?” said Andrea DiCenso, co-portfolio manager at Loomis Sayles, in an interview with Bloomberg TV. “We are seeing less than potentially three cuts priced into the market.”
Elsewhere, investor confidence in Germany’s economic outlook jumped to the highest in more than two years, driven by expectations that the European Central Bank is ready to cut interest rates in the coming months. ECB President Christine Lagarde is due to speak Wednesday.
Bitcoin extended a retreat, tumbling around 6%, as investors digested a record daily outflow from the world’s biggest exchange-traded fund for the token. That fueled declines for cryptocurrency-linked companies, with Coinbase Global, Riot Platforms, Marathon Digital and others on the backfoot.
Corporate Highlights:
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AstraZeneca Plc agreed to buy Fusion Pharmaceuticals Inc. for as much as $2.4 billion as it seeks to transform cancer treatment by replacing traditional methods like chemotherapy with more targeted approaches. Fusion Pharma shares jumped 95% in US premarket trading.
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Unilever Plc plans to separate its ice cream business that includes brands such as Ben & Jerry’s as Chief Executive Officer Hein Schumacher streamlines the UK consumer-goods conglomerate by cutting 7,500 jobs.
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Nvidia Corp. showed off a new processor design called Blackwell is multiple times faster at handling the models that underpin AI, the company said at its GTC conference in San Jose, California.
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Thyssenkrupp AG and private equity firm Carlyle Group Inc. are in discussions that could lead to a partial sale of the steelmaker’s naval shipbuilding unit.
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Airbus SE has walked away from talks to buy the big data and cybersecurity business from Atos SE, leaving the embattled French IT company with fewer options for reducing debt.
Key events this week:
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Germany ZEW survey expectations, Tuesday
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European Central Bank Vice President Luis de Guindos speaks, Tuesday
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US housing starts, Tuesday
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Eurozone consumer confidence, Wednesday
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Fed rate decision; Chair Jerome Powell holds news conference, Wednesday
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Reddit’s IPO, Wednesday
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ECB’s Christine Lagarde speaks, Wednesday
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Thursday
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Bank of England rate decision, Thursday
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US Conference Board leading index, existing home sales, initial jobless claims, Thursday
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Nike, FedEx earnings, Thursday
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Japan CPI, Friday
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Germany IFO business climate, Friday
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Atlanta Fed President Raphael Bostic speaks, Friday
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ECB’s Robert Holzmann and Philip Lane speak, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 fell 0.2% as of 11:37 a.m. London time
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S&P 500 futures fell 0.5%
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Nasdaq 100 futures fell 0.6%
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Futures on the Dow Jones Industrial Average fell 0.2%
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The MSCI Asia Pacific Index fell 0.5%
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The MSCI Emerging Markets Index fell 1%
Currencies
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The Bloomberg Dollar Spot Index rose 0.3%
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The euro fell 0.2% to $1.0848
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The Japanese yen fell 0.9% to 150.43 per dollar
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The offshore yuan was little changed at 7.2109 per dollar
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The British pound fell 0.3% to $1.2692
Cryptocurrencies
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Bitcoin fell 6.9% to $62,717.51
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Ether fell 7.8% to $3,234.55
Bonds
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The yield on 10-year Treasuries was little changed at 4.32%
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Germany’s 10-year yield was little changed at 2.46%
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Britain’s 10-year yield declined three basis points to 4.06%
Commodities
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Brent crude was little changed
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Spot gold fell 0.3% to $2,154.66 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Winnie Hsu, Tassia Sipahutar, Cecile Gutscher and Paul Dobson.
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