Hot topic. The Bank of Japan held interest rates steady on Tuesday and moved to add more flexibility to its policy framework, defying speculation it may make major adjustments to its stimulus programme.
In a closely-watched monetary policy decision, Japan’s central bank once again stood firm against the global move towards tighter policy among the world’s heavy-hitting central banks, announcing overnight interest rates will remain at minus 0.1 per cent and that 10-year bond yields will stay capped at around zero per cent.
However, the bank said it would allow for greater movement of the yield on 10-year Japanese government bonds and said it would “revise the purchase amount of each ETF and increase that of ETFs” that track the Topix, a shift further away from focus on the more volatile price-based Nikkei 225 index.
After the decision, the yield on 10-year Japanese government bonds was down 4 basis points on the day at 0.052 per cent after touching a high of 0.123 per cent earlier. Yield on the 10-year US Treasury was also down 4bp at 2.938 per cent.
The yen was 0.1 per cent weaker against the dollar at ¥111.18, having earlier firmed to ¥110.76.
Brexit News. Michel Barnier, the EU’s chief negotiator for Brexit, has softened his opposition to Theresa May’s post-divorce plan for London’s financial services industry. It comes a day after Deutsche Bank’s move to concentrate euro-clearing in Frankfurt rather than London revived concerns that Brexit could erode the City’s status.
Pyongyang was working on new missiles. North Korea no longer poses a nuclear threat, Donald Trump declared after his meeting with Kim Jong Un. That’s now in doubt after US spy agencies said Pyongyang was working on new missiles. The reports come after recent revelations about a suspected uranium enrichment facility that North Korea is operating in secret.
Uber hits brakes on trucks. The company dropped its plan to develop self-driving trucks and will now “move forward exclusively with cars”. The decision follows a fatal crash involving one its test cars in March, which prompted a review of its autonomous technology development.
Turkish‘Inflation. Turkish inflation figures this week are likely to provide a reminder why investors were so stunned when the country’s central bank left interest rates on hold last week. Economists predict that inflation accelerated to more than 16 per cent in July.
Tesla News. There’s been much excitement after researchers backed by Tesla founder Elon Musk and Silicon Valley financier Sam Altman taught a robotic hand to grab things like a human would. The discovery could eventually make it more economical to train robots to do things that are easy for humans. Speaking of Tesla, the Wall Street Journal reports that the company is exploring building its first major European factory.
Apple’s moment. The sell-off of big technology groups resumed on Wall Street on Monday. So Apple’s quarterly earnings, out today, will be closely watched.The iPhone maker’s results come hot on the heels of Samsung’s update on Tuesday in Asia. The company reported its first profit drop in 7 quarters after lacklustre smartphone sales.
Manafort’s moment. Paul Manafort, the lobbyist who helped run Donald Trump’s 2016 presidential campaign, is scheduled to go to trial on financial fraud charges. It is the first trial stemming from charges brought by Robert Mueller, who is investigating Russia’s interference in the campaign.