A look at the day ahead in European and global markets from Vidya Ranganathan
its long-running yield control policy on Friday, just days after the Fed opted to be non-committal on the future path of rates and the ECB hinted at pauses.
The BOJ maintained its guidance allowing the 10-year yield to move 0.5% around the 0% target, but said those would be "references" rather than "rigid limits". More significantly, it followed up with an offer to buy 10-year Japanese government bonds at 1.0% in fixed-rate operations, instead of the previous rate of 0.5% - leaving the bond market stupefied and confused while the yen swung wildly as the market digested the stealth move.
For investors, there is much riding on whether they see any BOJ move as a technical adjustment to a highly constrictive yield-curve-control policy or the start of a tightening cycle in the world's biggest creditor nation with billions invested in U.S. stocks and financial markets. That's against the backdrop of a "goldilocks" scenario in the United States, after Chair Jerome Powell suggested a soft landing for the economy because the central bank's staff no longer forecast a recession - not entirely good news for those anticipating rate cuts by next year.
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