On Tuesday (October 31st) in New York, the Japanese yen fell against a group of major currencies, falling to a one-year low against the US dollar, and plummeting to a new 15-year low against the euro. It also experienced varying degrees of decline against the British pound, Swiss franc, and Australian dollar.
The specific market situation shows that as of press release, the USD/JPY was at 151.50, with a intraday high of 151.73, the highest level since October last year.
The euro is currently trading at 160.17 against the Japanese yen, reaching a daily high of 160.85, a new high since August 2008.
Specifically, the Bank of Japan adjusted its "yield curve control" (YCC) plan again on Tuesday, as previously reported by the media: the upper limit of the yield of Japan's 10-year treasury bond bonds will be 1% "as a reference", which is a highlight of this monetary policy meeting.
The Bank of Japan has redefined 1.0% as a "loose upper limit" rather than a strict upper limit; And the commitment to defend this level by purchasing unlimited amounts of bonds has been cancelled, meaning that the central bank will implement bond buying operations "more flexibly" to lower yields.
Analysis suggests that the Bank of Japan has only "taken a small step" on the path of monetary normalization, failing to meet the expectations of investors who expect greater measures. When Japanese media revealed the news on Monday, market participants initially believed that the bank would take more obvious and powerful actions.
Karl Schamotta, chief market strategist at foreign exchange payment support firm Corpay in Toronto, Canada, commented that the market is disappointed with the chaotic information transmission and indecisive policy direction of the Bank of Japan.
Schamotta pointed out that "the bank has converted the yield ceiling into a reference value and failed to completely eliminate YCC. Policy makers have maintained an ambiguous attitude towards how they need to intervene in the bond market, reducing the possibility of widespread capital outflows
In contrast, a series of new data from the United States shows economic resilience, continuing to drive the US dollar and US bond yields to maintain a high level. According to data released before the US stock market, the Q3 Labor Cost Index (ECI) in the US recorded a month on month increase of 1.1%, higher than the market's previous expectation of 1%.
In addition, the year-on-year increase in housing prices in the United States in August also accelerated for the third consecutive month, highlighting the beginning of a recovery in the real estate market. This week, the Federal Reserve will announce its latest interest rate resolution in the early hours of Thursday Beijing time. Even with low expectations of rate hikes, officials are expected to maintain a hawkish stance and reiterate their determination to fight inflation.