Japanese investors raised their holdings in foreign stocks, driven by a benign U.S. core inflation report that fuelled expectations of Federal Reserve cuts and boosted global equities, while a strong yen also lifted domestic buying power.
Traders look to Trump’s speech for a fresh impetus ahead of the BoJ decision on Friday.
Shares are mixed in Asia after U.S. stocks edged back from their all-time high, with many regional markets closed for lunar new year holidays
The Japanese yen is slightly lower on Thursday. In the European session, USD/JPY is trading at 156.25, down 0.16% on the day.
The Bank of Japan hiked interest rates on Friday to their highest level in 17 years and signalled more were in the pipeline despite fears of turmoil under US President Donald Trump.
The U.S. dollar weakened against the yen on Thursday, as softer-than-expected U.S. economic data and growing confidence for a Bank of Japan interest-rate hike sent it tumbling to a near one-month low against the Japanese currency.
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Looking back, yen-funded carry trades have turned out to be among the most profitable plays this year. Of 20 major emerging markets currencies, all generated positive total returns, led by the Turkish lira’s 19% and Mexican peso’s 14%.
Japanese markets eked out modest gains despite the yen's rise amid speculation of a BoJ rate hike next week. The Nikkei average edged up by 0.33 percent to 38,572.60 while the broader Topix index settled marginally lower at 2,688.31.
Japan's central bank has raised its key interest rate to about 0.5% from 0.25%, noting that inflation is holding at a desirable target level.
In a turn of events, the White House said on Monday that “Colombia has agreed to all of President Donald Trump’s terms, including unrestricted acceptance of all illegal aliens from Colombia returned from the United States (US).”
The dollar firmed on Monday as traders pondered the ramifications of U.S. President Donald Trump's tariff plans at the start of a week where the Federal Reserve is widely expected to hold interest rates steady.