EUR/USD is down 0.42%. BOJ surprisingly cut interest rate.

After a rally started on Monday Euro seemed to break higher, however as of the end of Tokyo session the EUR/USD was trading at 1.0895, which is 0.42% lower than the previous close.

Oil prices continue to rise today. As of 02:30 ET the WTI Crude was trading at 33.89 USD/bbl, up 2.02%, and Brent Crude at 34.68 USD/bbl, which is 2.33% higher than the previous close.

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The Bank of Japan surprised the investors by cutting its benchmark interest rate below zero today. The negative rate of 0.1% will be effective from Feb 16. The central bank will continue to pay 0.1% on some reserves that banks have already placed. And it will pay no interest on particular reserves that are held to meet regulatory requirements. The bank also stated that it will cut the interest rate even further if necessary.

bank-japan

BOJ Governor Haruhiko Kuroda said that Japan is recovering moderately and the underlying price trend is rising steadily. There’s a risk recent further falls in oil prices, uncertainty over emerging economies, including China, and global market instability could hurt business confidence and delay the eradication of people’s deflationary mindset.

After this announcement the Asian shares jumped. Below are presented the performance of major indices:

  • Shanghai Composite soared 3.09%, closing at 2,737.60.
  • Nikkei 225 climbed 2.80% finishing the session at 17,518.30.
  • Hang Seng closed at 19,683.11, gaining 2.54%.

The rate cut decision affected the yen also. USD/JPY jumped to 121.43 in the afternoon trading. As of 02:50 AM EST the currency pair was trading at 120.7050, which is 1.59% higher than the previous close.

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I’m a finance specialist with 4+ years of working experience, out of which 2 years as a SME relationship manager at Byblos Bank and 2 years as a Finance Director in a Food & Beverage sector. My academic background include BA in economics, MA in finance, CFA Level 1 and F1, F2, F3 level of ACCA. I’m also experienced in Forex/CFD trading and Forex/ Equity markets analysis.

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