Daily Market Update

Bank of Japan makes history, Dollar crushes though

March 19, 2024

The U.S. Dollar is trading in stronger ranges to start a new era in which no central bank is keeping interest rates below zero percent.


Much to our surprise, the Bank of Japan decided to break its 17-year hiatus from increasing interest rates and finally hiked to clear away from keeping rates in negative territory. The reaction has not been what would have been expected, with the Japanese Yen plummeting in value to its weakest point thus far this year. Bonds did happen to gain big time as they climbed to their highest since 1990. Overall, the Buck is up by over half a percent all across the board.

What was “dovish” about the BOJ’s announcement was their commitment to maintain their long-term sovereign debt while scrapping their control over the yield curve. Essentially, this keeps a bit of central bank divergence alive as the move was not backed by confidence that another hike could come again anytime soon.

Meanwhile, there is concern amongst investors and traders over how much market concentration has formed that only makes a few companies attractive. While minor in the greater scheme of things, it is worth pointing that February Housing Starts as well as Building Permits all jumped more than expected. For now, all items are boosting the dollar as it recovers the losses seen during the first half of March.

What to Watch Today…

  • FOMC Presser on Wednesday
  • BOE & SNB on Thursday
  • Banxico on Thursday
  • Monex USA Online is always open.

View Economic Calendar



The Euro is the least affected of all currencies this morning following the shock for the BOJ. There have been some sectors showing improvement in the Euro-zone, and Germany, which we believe hit bottom, is trying to return to a hopeful mood. Investor confidence improved to the highest reading in two years as Germans feel it will be a good thing financially once the European Central Bank cuts interest rates. Tomorrow, we will get statements from Christine Lagarde, ECB Head, which could give some more guidance about the timing for reductions.


The Japanese Yen fell as the globe reacted to the BOJ’s change in policy, with interest rates now with an upper bound of 0.1% and the end of their management of the yield curve. Governor Kazuo Ueda explained that officials felt right about the move, voting 7-2, because they see the 2.0% inflation target as achievable. They also credited themselves for staying put and using large-scale monetary easing to aid the Japanese economy. However, they feel there is room for more economic growth and believe in continuing to stimulate markets via quantitative easing. Overall, this ends an era of negative interest but does make the JPY the reserve currency everyone will jump to right away to lessen dollar positions. Affordable Yen rates are making investment in Japan more attractive.


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