Headlines:

Markets:

  • JPY leads, AUD lags on the day
  • European equities slightly lower; S&P 500 futures flat
  • US 10-year yields up 6.3 bps to 3.653%
  • Gold up 1.0% to $1,805.21
  • WTI crude up 1.3% to $76.19
  • Bitcoin up 1.3% to $16,802

European traders were greeted to a surprise in Asia after the BOJ announced a tweak to its yield curve control policy. That went against market expectations and saw the Japanese yen and bond yields surging higher, with the yen continuing to hold over 3% gains across the board against the major currencies today.

BOJ governor, Haruhiko Kuroda, tried to downplay the move but at the end of the day, it seems that actions speak louder than words.

USD/JPY was already down from 137.15 to 133.00 in the handover from Asia to Europe, before falling further to hit 132.00 during the session as the yen maintained its unrelenting advance on the day.

The dollar was initially higher against the rest of the major currencies bloc, as risk sentiment wilted after the BOJ surprise. However, that reversed as we see S&P 500 futures recover from being 40 points down, or 1% lower, at one point to turn flat on the day currently.

In turn, EUR/USD lifted itself up from 1.0580 to 1.0640 and GBP/USD up from 1.2085 to 1.2190 before the rebound is seen easing a little. AUD/USD also managed to recover from 0.6630 to 0.6695 before keeping slightly lower now at 0.6660 levels.

As the BOJ sent Japanese bonds reeling, yields elsewhere also jumped with 10-year Treasury yields seen up over 6 bps to 3.65% on the day. Meanwhile, 10-year JGB yields have moved up to above 0.40% to their highest since 2015.

It's now over to Wall Street to settle the score for equities and broader market sentiment, after what looked to be a purely risk-off wave in the run up to Europe.