investingLive European markets wrap: Yen fades BOJ good points; greenback companies, shares tentative

Headlines:

Markets:

• USD and JPY lead, GBP lags on the day
• European equities mixed; S&P 500 futures up 0.1%
• US 10-year yields up 3.3 bps to 4.137%
• Gold up 0.2% to $3,650.47
• WTI crude oil down 0.3% to $63.39
• Bitcoin down 1.0% to $116,460

The early half of the session was dominated by the BOJ as the Japanese central bank kept interest rates unchanged in their policy meeting today. However, it was the rate vote that raised eyebrows with Tamura and Takata both dissenting in favour of a proposition to raise interest rates by 25 bps.

That led USD/JPY to fall in late Asia trading to 147.20 before we got to BOJ governor Ueda’s press conference. Ueda played things down in trying to brush off the dissents, as he mostly reaffirmed the majority view as being part of the main line of communique from the BOJ.

That alongside some modest dollar strength during the session led USD/JPY back up to remain close to flat levels now around 147.95.

As mentioned, the greenback kept gains from yesterday and is still seen advancing slightly today with EUR/USD down 0.2% to 1.1757 though large option expiries is holding losses in the pair for now. The laggard though is the pound, continuing the downside run post-BOE despite increasing calls for no more rate cuts this year. Cable fell from 1.3540 to sit just under 1.3500 currently, down 0.5% on the day.

Other major currencies also lagged behind against the dollar with USD/CHF seen up 0.4% to 0.7955 while USD/CAD is up 0.1% to 1.3808. Meanwhile, AUD/USD is also down slightly by 0.2% to hover near 0.6600 on the day.

In other markets, stocks remain more muted amid some light pushing and pulling. European indices started off with marginal gains but are now keeping more mixed with the DAX down 0.2% but CAC 40 seen up 0.2%. S&P 500 futures fell a little by 0.2% during the session but are now just a touch higher by 0.1% ahead of US trading.

Amid the surprise rate votes from the BOJ decision, that pulled up short-term JGB yields. 2-year and 5-year JGB yields soared to 0.90% and 1.20% respectively, both the highest since 2008. That’s also keeping with the continued rise in yields after the Fed in the US, with 10-year Treasury yields holding just a little higher on the day now.

In the commodities space, gold is keeping steadier as it consolidates the drop in the past two days. There seems to be some exhaustion to the upside run, so we’ll see if that will lead to a pocket of correction for the precious metal in the weeks ahead. All that before we start gearing towards the stronger seasonal months in December and January of course.