As risk aversion spreads against a backdrop of U.S. political uncertainty, reactions to this week's key events and economic indicators may be limited. The report focuses on USD/JPY movements and market reactions amid heightened uncertainty.
The Bank of Japan released the minutes of its September Monetary Policy Meeting, which contained many comments viewing a rate hike positively. The minutes included wording such as “a nimble response in line with changes in overseas financial conditions,” suggesting the possibility of additional rate hikes.
Australia's September trade balance was a surplus of A$2.826 billion, larger than the previous month's surplus. A modest increase in exports and a decline in imports pushed up the surplus.
The Bank of England raised its policy rate from 3.75% to 4.00%, as expected. The minutes showed an 8-1 vote in favour and an upward revision to the outlook. Governor Bailey suggested the possibility of additional rate hikes but did not assert that they would continue for an extended period.
U.S. initial jobless claims were 189,000, matching a 57-year low. The market expected 196,000, while the four-week moving average fell from the previous week to 195,000.
U.S. share prices fell sharply, and the decline in Nikkei futures widened. Concerns about AI regulation in the U.S. market following the Democratic Party's victory became a selling factor, strengthening the combination of lower U.S. share prices and a stronger yen.