BOJ rounds off the central bonanza for the week

It wasn’t just the BOJ that was the only Asian central bank in focus today. The PBOC was also on the agenda but left the loan prime rate (LPR) unchanged, even though there were some expectations for a cut. Here’s the round up of the week in central banks so far:

• Federal Reserve September interest rate decision: 50 basis point cut
• Powell opening statement: We’re committed to preserving our economy’s strength
• Powell Q&A: We concluded that 50 basis point cut was the right thing
• BOE leaves bank rate unchanged at 5.00%, as expected
• China leaves 1- and 5-year Loan Prime Rates (LPR) unchanged
• Bank of Japan leaves rates unchanged, as widely expected

USD/JPY is keeping a little lower on the day, now seen at 142.27 and down from the high of 142.93 in early Asia trading. But that also owes in part to lower Treasury yields again. 2-year yields are down 3.4 bps to 3.570% while 10-year yields are down 2.3 bps to 3.716%.

Besides that, major currencies are keeping in tighter ranges with the dollar licking its wounds after the fall yesterday.

There is still some post-Fed digestion to work through, with traders having to consider what the Fed might do in the coming months. Are they going to try and bully the Fed again? Or will economic data vindicate the dot plots put out on Wednesday?

This article was written by Justin Low at www.forexlive.com.