| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 03:00 | Japan | BoJ Interest Rate Decision | | 0.25% | 0.5% | 0.5% |
During today's Asian trading, the US dollar declined markedly against major currencies, reaching its lowest level since December 18 amid Donald Trump's comments on China's tariffs and the Fed's monetary policy trajectory.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.41% to 107.69. Since the beginning of the week, the index has lost 1.5% and is preparing to record the largest drop since mid-November. Yesterday, Trump said that he would rather not have to use tariffs over China and that he thought he could reach a trade deal with the world's second-largest economy. In addition, Trump demanded that the Fed lower interest rates, arguing that he understands monetary policy better than those charged with setting it. These statements were made just a few days before the first meeting of the Fed, which will be held under his administration, while experts expect officials to leave rates unchanged. According to the CME FedWatch Tool, markets see a 0.5% probability of a 0.25% rate cut in January (compared to 2.1% a week ago).
The yen rose 0.5% against the US dollar after the Bank of Japan raised interest rates to 0.5% and revised up its inflation forecasts. The decision, backed by an 8-1 vote, reflects the central bank’s growing confidence in wage-driven inflation and economic stability. Policymakers emphasized that real interest rates remain negative, supporting economic activity, while signaling the potential for further hikes if inflation and growth align with projections. BoJ forecasts indicate consumer inflation (excluding fresh food) will reach 2.7% in the year ending March 2026. It predicts that the measure of inflation will rise 2.4% in the year ending March 2026 and 2.0% in the following year. Economic growth is expected to hit 0.5% this fiscal year, improving to 1.1% in the year ending March 2026. Meanwhile, today's data showed that Japan's core CPI rose by 3.0% per annum in December, which was the fastest annual pace in 16 months.