As a preliminary gauge of sentiment, we see that Asia had a volatile start for the first trading year of 2017 as trading volumes struggle to get back to normal. Some of the major financial markets are still in holiday mode so we will have to wait a little bit more to see some comeback.
There was light action in forex markets on Friday as traders settled down for the Christmas holidays, although the sentiment remains bullish for more dollar gains in the New Year as yield spreads widen in its favor.
The dollar held strong against its major rivals on Wednesday, hovering near a 14-year peak versus the euro, driven by bets of higher U.S. growth and a faster pace of interest rate increases under incoming president Donald Trump.
The BoJ made no changes to its policy rate, maintaining negative rates for banks’ excess reserves, and making no changes to its asset purchases or JGB yield targets.
The BoJ was due its monetary policy statement overnight as it concluded its 2-day meeting.