In This Article:
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Bank of Japan on hold; yen falls past 148/dollar
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10-year Treasury yields breach 4.5%
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Ueda speaks at 0630 GMT; Europe PMIs ahead
By Tom Westbrook
SINGAPORE, Sept 22 (Reuters) -
Stocks eyed their worst week in a month on Friday and Treasuries hit decade lows as investors hunkered down for U.S. interest rates to stay high for some time, while the yen was pinned near an 11-month trough after the Bank of Japan left short-term rates below zero.
Benchmark 10-year U.S. Treasury yields hit a 16-year high of 4.508% in Tokyo. Thirty-year yields hit their highest in a dozen years.
MSCI's index of global equities was flat, with a 2.6% drop for the week so far.
MSCI's index of Asia-Pacific shares ex-Japan touched a 10-month low before bouncing 0.5% on vows in China to
support private business
. It is down 2.8% this week.
The Bank of Japan (BOJ), as expected,
maintained
super-low interest rates and left its outlook and yield control policy unchanged to signal it was in no hurry to end massive stimulus.
The yen fell about 0.4% to 148.12 per dollar after the announcement but stopped short of Thursday's 11-month low, with traders extra wary of intervention after the BOJ noted it was watching the impact of FX moves on Japan's economy.
"It just puts markets further on notice that it's not a green light to be buying dollar/yen with impunity," said Ray Attrill, head of FX at National Australia Bank in Singapore.
Japan's Nikkei pared losses of as deep as 1% to trade 0.2% lower in the afternoon.
European stock futures and FTSE futures also pared losses to trade about 0.2% lower in Asia. S&P 500 futures rose 0.2%.
Ten-year Japanese government bond futures rallied though cash yields were little changed and near decade highs at 0.74%.
BOJ Governor Kazuo Ueda is due to give a press conference at 0630 GMT and is sure to be asked whether the sliding yen might hasten a policy shift and to elaborate on
recent remarks
suggesting that conditions for rate hikes might arrive by year's end.
"Of course, there is no way that the BOJ will respond to weakening yen by raising interest rates or other monetary policy measures, but it will be interesting to see how much caution the BOJ takes with regard to the current financial markets," said Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking Corporation in Tokyo.
TURNING POINTS
The BOJ decision almost rounds out the week for major market events, though British and European PMIs are due later as are speeches from U.S. Federal Reserve officials Mary Daly, Neel Kashkari, Susan Collins and Lisa Cook.