The Bank of Japan maintained its short-term interest rate unchanged at -0.1% and promised to ensure the yield of 10-year government bonds at about zero percent under the policy of controlling the yield curve. This publication took place within a few hours after the release of the Fed Interest Rate Decision, which was also left unchanged. Nevertheless, it was announced that another increase is expected before the end of the year, which led the dollar to a two-month high against the Japanese yen. Market participants are also waiting for Kuroda’s comments on how the change in Japan’s political landscape will affect its monetary policy. In New Zealand, economic growth accelerated in the second quarter, GDP reached 0.8%, justifying the forecasts of economists. This was the most important economic publication in New Zealand before the September 29 elections.
In the foreign exchange market, the US dollar rate reached a two-month high against the Japanese yen. To the euro, the dollar increased Tuesday’s achievements, and this growth was due to an increased probability of an increase in the Fed’s interest rate in December this year. Investors are inclined to believe that the Fed will implement the planned increase by the end of 2017, and also expect another three increases in 2018. The euro fell 0.1% after falling 0.8% the day before when the currency unfolded an uptrend 4 previous days. The US dollar against the yen rose by 0.2% to 112,645, the highest since July 18.
Oil fell in price during the Asian session, helped by the increase in oil and production in the US, as well as the growth of the dollar, which potentially hinders fuel consumption in countries that use other currencies for domestic use. On Friday, OPEC will hold a meeting in Vienna, where the issue of production cuts, which has taken place since January, will be discussed with representatives of countries outside the OPEC. The current agreement expires in March 2018. If OPEC decides to expand production cuts, the cost of raw materials in the markets will increase.