Tokyo, Japan – In a move that surprised markets, the Bank of Japan decided to keep its benchmark policy rate unchanged at 0%-0.1%. This decision caused the Japanese yen to weaken beyond 156 against the U.S. dollar, reaching fresh 34-year lows. In response, the Nikkei 225 index extended gains by 0.7%, indicating a positive outlook among investors.
Investors are eagerly anticipating a press conference later in the day by BOJ Governor Kazuo Ueda to gain further insights into the rationale behind the decision. The Bank also announced its intention to continue bond purchases in line with the March decision, providing stability in the financial markets amidst the currency fluctuations.
Moving to Taiwan, shares of Hon Hai Precision Industry surged by 4.3% in early trading, hitting a high not seen in over two weeks. This boost came after U.S. software company Cerence announced a partnership with Hon Hai’s EV subsidiary Foxtron to supply a voice-powered AI assistant. The system will feature bilingual recognition of Taiwanese Mandarin and English, catering to the local market’s preferences.
In another development, Tokyo’s inflation rate slowed significantly in April, with core inflation falling below economists’ expectations. This data, which represents a leading indicator of nationwide trends, could potentially impact the Bank of Japan’s future policy decisions regarding monetary measures to stimulate economic growth.
Looking ahead, economists are eagerly awaiting the release of the personal consumption expenditures price index by the Federal Reserve. This data is crucial for understanding the latest inflation metrics, especially in light of the recent GDP report showing an increase in PCE. The report revealed potential concerns about stagflation, leading to a sell-off in the stock market as investors reacted to the data.
In after-hours trading, several companies experienced significant movements, with Snap shares soaring by over 27% after reporting first-quarter results that exceeded analysts’ estimates. However, tech giant Intel saw a decline of 8% after missing expectations for first-quarter sales, highlighting the volatility in the current market environment. As companies navigate through these challenges, the market continues to fluctuate, reflecting the ever-changing landscape of the global economy.
