Japan’s 2-year yield briefly crosses zero for first time since 2015
Since 2015, the yield on 2-year Japanese bonds has briefly risen above zero in Wednesday morning trading. The grade gained 2.7 basis points to stand just below the line.
Japan’s 2-year output falls below zero for first time since 2015
The yield on the 10-year JGB rose more than 3 basis points to stand at 0.451%, hitting a 2015 high, while the yield on the 30-year JGB rose 2 basis points. and traded at 1.6%.
Commodities move inversely to price, and a basis point is equal to 0.01%.
– Jihye Lee
Bank stocks in Tokyo are rising again as the broader index falls
The Japanese yen is the strongest in more than four months
The Japanese yen strengthened further overnight after the Bank of Japan announced it was widening its yield control band.
The currency strengthened more than 5% against the Australian dollar and the New Zealand dollar – while it strengthened 3% against the US dollar.
The yen strengthened after the Bank of Japan announced that it was expanding its yield control band
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– Zavier Ong
Stocks hold on to gains, snapping 4-day losing streak
Stocks posted a gain on Tuesday, snapping a four-day losing streak.
The Dow Jones Industrial Average rose 92.47 points, or 0.28%, to close at 32,850.01. The S&P 500 rose 0.11 percent to 3,821.73, while the Nasdaq Composite gained 0.01 percent to close at 10,547.11.
– Carmen Reinicke
The Bank of Japan is faster-than-expected, it shows
The Bank of Japan’s surprise policy change sent interest rates higher around the world, as investors reacted to more evidence that central banks around the world will pressure interest rates higher.
“It was definitely a surprise. I don’t think anybody out there was expecting it,” said Ben Jeffrey, rate strategist at BMO. Japan’s central bank was quicker-than-expected to tighten policy. The BOJ changed its yield policy to allow the 10-year Japanese government bond yield to rise 50 basis points to either side of its target rate of zero, up from 25 basis points.
The announcement lifted rates around the world, as yields on Japanese government bonds (JGBs) hit a 7-year high. Rates go against productivity. The US 10-year yield rose to 3.68 percent.
“They were definitely the last to stop in terms of pigeons, and now they’re still fun but less so,” Jeffrey said. “It is clear that JGBs and fixed income are declining globally, but in the long run it should help the yen which will make Treasurys more attractive to Japanese investors next year.”
Expect a tougher environment ahead, says Atlantic Equities
Atlantic Equities analysts predict a tougher outlook for global consumers in 2023.
“Inflation may have peaked on a core basis but input costs are still high and companies will expect to see higher prices if not in some cases,” analyst Edward Lewis said on Tuesday. “This may become more difficult as elasticity levels begin to normalize with US retailers starting to pull back on price inflation, compared to where European peers have been all year.”
He highlighted Coca-Cola and Pepsi as some of his favorite consumer picks, citing “category strength, continued investment and strong execution supporting high growth.”
– Tanaya Macheel
The stock market has lost 11.7 trillion dollars so far this year
It’s been a tough year for stocks, which are currently in the market and are down year-to-date.
From the market’s annual high on Jan. 3 through this morning, U.S. stocks lost $11.7 trillion in market value, according to Bespoke Group data.
“The maximum drawdown was $13.6 trillion on 9/30, so we’ve seen market capitalization increase by just under $2 trillion since then,” analysts wrote Tuesday. “In dollar terms, this drop has been more severe than anything investors have ever experienced. That’s pretty deflationary if you ask us!”
Of the $11.7 trillion, more than $5 trillion in losses come from just five companies — Apple, Microsoft, Amazon, Alphabet, Meta and Tesla.
– Carmen Reinicke