Yen Drops on BoJ’s Dovish Tone, US Futures Decline – Europe Market Wrap

The yen plummeted as the Bank of Japan ended the world’s final negative interest-rate policy and emphasised that financial conditions would remain favourable.

The Bank of Japan’s first raise in 17 years was widely predicted, and Governor Kazuo Ueda adopted a moderate tone during a news conference, stating there is still a risk the inflation target may not be met. While the central bank discontinued its yield curve management programme, it committed to continue purchasing long-term government debt.

Japanese bonds rose, while the Topix closed at its highest since 1990. The yen fell 0.9% against the dollar, to 150.54. In a busy week for central bank decisions, the focus now goes to the Federal Reserve’s meeting this Wednesday.

The dollar rose, while Treasuries were barely changed. European markets were flat, and US contracts hinted to minor changes on Wall Street following Monday’s tech-driven rally.