Nikkei scales 34-year peak on weakening yen

2024-01-23
Summary:

Japanese shares hit a 34-year high as the yen stabilized on Tuesday. The BOJ is anticipated to adjust its ultra-loose policy in H1 2024.

Japanese shares surged to fresh 34-year highs despite that the yen steadied on Tuesday with the BOJ expected to tweak its ultra-loose policy in the first half of this year.

The total market cap of shares listed on the Tokyo Stock Exchange passed that of Shanghai’s bourse last week in dollar terms, regaining the top position in Asia.


Berkshire Hathaway has been building its stake in the five largest Japanese general trading companies since disclosing an increase in ownership last summer, the CEO of Sumitomo, one of those companies.


The yen has shed 5% in 2024 against the dollar to continue its losing streak. Fed officials seem in no hurry to cut interest rates, raising doubts about the policy convergence story that pushed the currency higher at the end of last year.


Oil prices rallied towards $80 again as a Ukrainian drone strike on Russia's Novatek fuel terminal. The tensions in Europe and the Middle East are flaring up, which reignites inflation concerns.


Economists polled by Reuters expect the BOJ to scrap the decades-long negative rate in April. Governor Kazuo Ueda’s press conference due later in the day is the main focus.

USDJPY

The yen is under renewed pressures below the key support level at 150 per dollar. USD-JPY will likely attract more dip-buying as long as the 50 SMA is respected.


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