investingLive European markets wrap: Yen slides further after BOJ press conference

Headlines:

Markets:

• USD leads, JPY lags on the day
• European equities little changed; S&P 500 futures up 0.8%
• US 10-year yields up 2.7 bps to 4.151%
• Gold down 0.2% to $4,325.23
• WTI crude oil up 0.4% to $56.09
• Bitcoin up 3.0% to $88,019

There wasn’t too much in European morning trade today, with the day being the supposed last “real” trading day for the year. Come next week, the Christmas and New Year break will overshadow everything else and that should lead to thinner liquidity conditions until we wrap up the year.

But for today, there was some decent action – particularly with the Japanese yen as the currency tumbled after the BOJ policy decision. The central bank raised its short-term policy rate by 25 bps to 0.75%, marking the highest in 30 years. However, the yen fell across the board in what is a sell the fact move.

USD/JPY already climbed up to 156.00 after the decision but extended gains as BOJ governor Ueda did not offer too much certainty of when the next rate hike will be. He did drop hints that it could be in March but as we all know, the threshold to trigger such conditions is very much higher than the one needed for today.

As such, USD/JPY also jumped up to break the early December highs in a push above 157.00 with the pair now up over 1% to 157.30 levels – its highest in nearly a month.

Besides that, the dollar held steadier in the major currencies space with the euro and pound keeping lightly changed against the greenback. The same as well for the loonie and aussie, with the FX looking rather dull outside of the yen today. That despite UK retail sales disappointing on economic woes, not being enough to do much to change the sterling outlook for now.

In other markets, European indices were relatively muted in closing out the week while US futures are pointing to a solid jump in tech shares once more. S&P 500 futures are up 0.8% with Nasdaq futures up 1.4% as investors continue the relief rally after the US CPI report yesterday.

In the commodities space, gold is not showing much interest alongside silver as precious metals continue to hang near the highs for the year. A consolidation of gains ahead of the holiday period perhaps? Meanwhile, Bitcoin is posting a decent bounce back to around $88,000 but the technical picture remains challenging with the cryptocurrency poised to end the year lower for the first time since 2022.

To those taking off for the holidays, I wish you a pleasant break and an enjoyable one at that. Merry Christmas and a very Happy New Year to everyone, in case we don’t cross paths again on the server for the year. Have a good one!