The Japanese yen crashed to the lowest level in more than 20 years as investors reacted to the latest interest rate decision by the Bank of Japan. The bank decided to leave interest rates unchanged at -0.10%, where they have been for years. It also decided to continue with its asset purchases as it warned about the slowing Japanese economy. The dovish statement contrasts with what other central banks have done. For example, the Fed has started hiking interest rates and it expects to implement more hikes this year. Earlier today, Swedish Riksbank decided to hike interest rates as it battles inflation.
The FTSE 100 index rose to the highest level since April 1 after the relatively mixed corporate earnings by constituent companies. In a report, Barclays said that its profit crashed by 18% as litigation costs rose. The company’s net income declined to 1.4 billion pounds from 1.7 billion in the same quarter in 2021. Revenue rose by 10% to 6.5 billion pounds. Meanwhile, Standard Chartered shares rose after the company reported upbeat results. Unilever’s business struggled as the cost of raw materials rose. As a result, the company decided to raise prices by 8%. Glencore expects to have a great year as commodity prices rise.
American futures rose as investors waited for the upcoming earnings by companies like Amazon and Apple. Analysts expect that the companies will publish strong results even as the cost of doing business rose. Apple will likely be affected by the recent lockdowns in China. The results come a day after Meta Platforms and PayPal reported strong results. On the other hand, companies like Altria, Netflix, T.Rowe Price missed analysts’ estimates.
The FTSE 100 index jumped sharply after the mixed quarterly results from the company’s constituents. On the hourly chart, the index managed to move above the key resistance level at 7,487, which was the highest point on April 26. It moved above the 25-period and 50-period moving averages. The Average Directional Index rose to the highest point since Monday. The Relative Strength Index (RSI) has also risen. Therefore, the index will likely keep rising in the near term.
The EURUEarn more in the markets with particular currency pairs from Monday to Sunday.SD pair crashed to a low of 1.0495, which was the lowest level since 2017. On the three-hour chart, the pair is below the dots of the Parabolic SAR indicator and the moving average. The Average Directional Index rose to the highest level in months. The Relative Strength Index (RSI) has moved below the oversold level. The pair will likely keep falling as the dollar strength continues.
The USDJPY pair rallied to the highest point since 2002 after the BOJ decision. The pair moved above the important resistance level at 129.47, which was the highest level since April 21. It also moved above all moving averages. The Relative Strength Index (RSI) and the momentum oscillator have continued rising. Therefore, the pair will likely keep rising as the divergence between the BOJ and Fed rises.
Source: FXStreet – OctaFX Analyst Team