Yen spikes after Japan intervention, stocks slump



*

Japan intervenes after dollar/yen breaks 145

*

Central bank bonanza as UK, Swiss, Norway hike

*

Stocks slump on Wall Street, in Europe, Asia

*

Bond yields rise after Fed rate hike

By Herbert Lash and Marc Jones

NEW YORK/LONDON, Sept 22 (Reuters) - The yen spiked higher on Thursday after the Federal Reserve's strong stance on rates the day before roiled the outlook for bonds and stocks while forcing Japan to intervene in FX markets to support its currency for the first time since 1998.

The dollar slid after surging to fresh two-decade highs following the Fed's raising of interest rates on Wednesday by a hefty 75 basis points. Its projection of more large increases to come cemented a "higher for longer" view on rates.

The bond market responded with the part of the yield curve measuring the gap between two- and 10-year Treasury notes inverting the most since at least 2000. The measure, a signal of a likely recession in a year or two, later eased a bit to stand at -42.0 basis points.

Stocks fell further on Wall Street and in Europe, where Russia's threat on Wednesday to use nuclear weapons amplified the existing economic pain and volatility from the Ukraine war. The major British, German and French bourses .FTSE .GDAXI .FCHI tumbled more than 1%.

But the day's big news was Tokyo swooping in to support the yen JPY=EBS soon after Europe opened. While such a move had seemed imminent for weeks - the yen has fallen 20% this year, almost half of that in the last six weeks - it still packed a punch.

The Japanese currency surged almost 4% to 140.31 to the dollar from 145.81 in a little over 40 minutes. The yen was last up 1.17% versus the greenback at 142.36.

Central banks hiking rates around the world and Japan fighting back against the weak yen cooled the dollar's latest burst to fresh highs, said Joe Manimbo, U.S. senior market analyst at Convera.

"But the Fed's unflinching determination to restore 2% inflation is likely to keep the buck well-supported for the foreseeable future," Manimbo added.

With the dollar stalled, the euro EUR=EBS edged up 0.01% to $0.9839 and other currencies gained as well.

Tokyo's move came just hours after the Bank of Japan maintained super-low rates, fighting the global tide of monetary tightening by the U.S. and other central banks trying to rein in roaring inflation.

Volatility and uncertainty have risen as the market comes to grips with a policy regime that is reducing liquidity after a decade of abundance, said David Bahnsen, chief investment officer at wealth manager The Bahnsen Group in Newport Beach, California.

"Excessive quantitative easing over the past decade is going to result in excessive tightening and the market has no way to properly price what this means for valuations," Bahnsen said.

On Wall Street, the Dow Jones Industrial Average .DJI closed down 0.36%, the S&P 500 .SPX dropped 0.85% and the rate-sensitive Nasdaq Composite .IXIC slid 1.37%.

The likelihood of a recession if the Fed maintains its rate-hiking stance suggests earnings will come down 15% next year, said Mike Mullaney, director of global markets at Boston Partners.

Excluding the energy sector, the estimated growth rate for the S&P 500 in the third quarter already has declined by 1.7%, according to Refinitiv data.

"We're going to revisit the (June) lows," Mullaney said of the S&P 500. "The number being thrown around by the bears is 3200. Under a recessionary scenario that's definitely in play."

In Europe, the pan-regional STOXX 600 index .STOXX lost 1.79% to close below 400 for the first time since January 2021. MSCI's gauge of global stock performance .MIWD00000PUS shed 1.04%, breaking below this year's bottom to touch lows last seen in November 2020.

MSCI's emerging markets index .MSCIEF fell 0.90% and Asian stocks MIAPJ0000PUS marched overnight to a two-year low after the Fed's rate hike and outlook.

The median of Fed officials' own outlook has U.S. rates at 4.4% by year's end - 100 bps higher than their June projection - and even higher, at 4.6%, by the end of 2023.

Futures 0#FF: scrambled to catch up. The yield on two-year Treasuries US2YT=RR hit a 15-year high of 4.135% in Asia and were last at 4.120%. Ten-year yields US10YT=RR set fresh 11-year highs and were last up 19 basis points at 3.702%.

In Europe, Germany's rate-sensitive two-year bond yield rose to 1.897%, its highest since May 2011, before easing to 1.833%.

FOLLOW THE FED

The Swiss National Bank also pulled up its rates by 75 basis points, only the second increase in 15 years. The move ended a 7-1/2-year spell with negative rates.

Also in Europe, Norway and Britain raised rates by 50 bps with traders seeing plenty more ahead.

The pound rose modestly on the day after hitting a 37-year low of $1.1213 overnight on growing worries about the state of Britain's finances. Sweden's crown SEK= had also touched a record low despite the country's steepest rate hike in a generation earlier this week.

The global economic outlook is helping drive the dollar higher as U.S. yields look attractive and investors think other economies look too fragile to sustain rates as high as those contemplated by the Fed.

Japan and China are outliers and their currencies are sliding particularly hard.

The dollar's rise has also sent emerging market currencies tumbling and punished cryptocurrencies and commodities.

Lira traders were left wincing again as Turkey, where inflation is running at around 85%, defied economic orthodoxy and slashed another 100 basis points off its interest rates.

Oil rose in volatile trading on concerns an escalation of the war in Ukraine could further hurt supply.

Brent crude futures LCOc1 settled up 63 cents at $90.46 a barrel and U.S. crude CLc1 rose 55 cents to settle at $83.49.

U.S. gold futures GCv1 settled 0.3% higher at $1,681.10 an ounce.

Bitcoin BTC=BTSP rose 4.76% to $19,345.00.



World FX rates YTD Link
Global asset performance Link
Asian stock markets Link
Yen sees historic drop Link
Central banks ramp up fight against inflation Link
Japan intervenes to prop up weak yen Link



Reporting by Herbert Lash, Additional reporting by Marc Jones
in London, Tom Westbrook in Sydney; Editing by Kirsten Donovan,
Nick Zieminski and Richard Chang



免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。

所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。

本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示:您的資金存在風險。槓桿商品並不適合所有客戶。請詳細閱讀我們的風險聲明