• The dollar extended losses against the yen on Wednesday after the Bank of Japan’s move to trim Japanese government bond (JGB) purchases in the previous session triggered speculation that it could begin tapering its massive, ultra-easy monetary stimulus.
Despite some support from higher U.S. yields, the dollar slipped 0.3 percent to 112.31 yen, struggling in the wake of a 0.5 percent drop on Tuesday when Japan’s central bank slightly reduced the amount of its JGB purchases in its regular buying operations.
Yields on the 10-year U.S. Treasury note reached a 10-month highs, partly lifted by the BOJ’s action.
The 10-year note yield stood at 2.553 percent in Asian trading, up from its U.S. close of 2.546 percent on Tuesday. It earlier matched the overnight high of 2.555percent, its highest since March.
The dollar index, which tracks the greenback against a basket of six major rival currencies, inched down 0.1 percent to 92.473.
The euro was steady on the day at $1.1937, well below its nearly four-month high of $1.2089 set last Thursday.
• “The BOJ’s move reminded traders of the fact that major central banks are willing to normalize their monetary policy,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“I think this unwanted strengthening of the yen will make the BOJ more cautious in going forward, when they want to move toward normalization,” he said.
• The global economy is set to expand by 3.1 percent in 2018, slightly up from 3 percent last year and marking the first year since the 2008 Great Recession that it will near or achieve full growth potential, the World Bank said on Tuesday.
In an update of its twice-yearly economic report, the World Bank however warned that the economic upswing this year was temporary unless governments adopted policies that would focus on increasing workforce participation.
The pace of world growth was expected to moderate to 3 percent in 2019 and 2.9 percent in 2020, it said.
Most of the growth will be driven by emerging economies, in particular commodity exporters, with growth rates for the group as a whole rising to around 4.5 percent in2018 and an average of 4.7 percent in 2019 and 2020, the Bank said.
• The Federal Reserve's inflation target is expected to remain out of reach in 2018, leaving the central bank disappointed for yet another year, Swiss bank UBS said Tuesday.
• China’s producer prices rose at their slowest pace in 13 months in December, as the government’s war against winter smog dented factory demand for raw materials in a sign the world’s second largest economy has started to slow.
The producer price index (PPI) rose 4.9 percent in December from a year earlier, the slowest growth since November 2016, the National Bureau of Statistics (NBS) said on Wednesday. That was slightly faster than the 4.8 percent in a Reuters poll of analyst but much weaker than the 5.8 percent pace seen in November.
China’s economy is expected to have posted growth of 6.8 percent in 2017, up slightly from the previous year, supported by a construction boom and robust exports.
• South Korean President Moon Jae-in credited U.S. President Donald Trump on Wednesday for helping to spark the first inter-Korean talks in more than two years, and warned that Pyongyang would face stronger sanctions if provocations continued.
• Oil prices hit their highest levels since 2014 on Wednesday due to ongoing production cuts led by OPEC as well as healthy demand, although analysts cautioned that markets may be overheating.
Brent crude futures LCOc1 were at $69.15 a barrel at 0648 GMT, 33 cents, or 0.5 percent, above their last close. Brent touched $69.29 in late Tuesday trading, its strongest since an intra-day spike in May 2015 and, before that, December 2014.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.44 a barrel - 48 cents, or 0.8 percent, above their last settlement. They marked a December 2014high of $63.53 a barrel in early trading.
Reference: Reuters, CNBC
Thai
Eng