The Bank of Japan and Federal Open Market Committee both began their September policy meetings on Tuesday. The Bank of Japan will conclude its meeting on Tuesday at 11 PM EST and will hold its press conference Wednesday morning at 2:30 AM EST, which could overshadow the announcement by the Federal Open Market Committee on Wednesday afternoon.
Results from Japan could take more attention if the central bank takes action and reduces its borrowing rate further or changes its bond buying, which many believe they are likely to do given the economic environment in the country. Currently with a central bank borrowing rate of -0.10%, the BOJ’s rate would likely fall to -0.30%. This would affect global yields to the downside and even more so if bond buying is also in effect. In Japan, bank stocks were mostly flat for the day with Mitsubishi UFJ Financial Group Inc. (MUFJ, Financial) gaining 0.82%.
In the U.S., the Federal Open Market Committee’s decision on central bank borrowing rates would likely be less influential as the Fed has postponed what it previously predicted to be nearly four rate hikes in 2016. Currently, the FOMC is trending towards tightened policy while the Bank of Japan is focused on easing.
A CNBC report Tuesday provided additional insight on the Bank of Japan and how its monetary policy will affect the global markets.
Disclosure: I do not own any stocks included in this article.
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