2025-10-31 05:06

BOJ holds rates, disappoints traders hoping for hawkish stance Fed dampens expectations for December rate cut, dollar gains Euro and sterling fall as ECB and BOE maintain rates NEW YORK, Oct 31 (Reuters) - The Japanese yen was heading for a monthly loss against the U.S. dollar on Friday after the Bank of Japan disappointed traders hoping for a more hawkish stance on future rate hikes, while the Federal Reserve dampened expectations for a December rate cut. The yen clawed back some losses after Japanese Finance Minister Satsuki Katayama said the government has been monitoring foreign exchange movements with a high sense of urgency as the yen weakens. Sign up here. Core inflation in Tokyo also accelerated in October and stayed above the central bank's 2% target, data showed on Friday. But disappointment after BOJ Governor Kazuo Ueda adopted a less hawkish tone on future rate hikes than hoped held the yen in check. The Japanese central bank kept rates on hold at 0.5%. Noel Dixon, global macro strategist at State Street Global Markets, said he remains constructive on the yen, adding that “the BOJ ultimately is still going to have to normalize policy at least to 1%.” “From a multi-year perspective, wages are definitely higher than they've been … and the fiscal spending is only going to exacerbate that prospect,” Dixon said. Japan’s newly elected leader, Sanae Takaichi, is expected to pursue more fiscally expansive policies to boost economic growth. The yen was last flat on the day and heading for its worst month since July, with the dollar up 4.2% against the currency this month. The dollar index rose 0.35% to 99.82 and is on track for a 2% monthly gain, its best since July. DIVIDED FEDERAL RESERVE The greenback has been boosted by optimism over the economic outlook even as the labor market weakens, while Fed policymakers remain concerned about inflation. Fed Chair Jerome Powell said on Wednesday that a policy divide within the U.S. central bank and a lack of federal government data may put another interest rate cut out of reach this year. “It sounded like he was just trying to give himself some optionality,” said Dixon. The Fed cut rates on Wednesday, as expected, though two policymakers dissented. Governor Stephen Miran again called for a deeper reduction in borrowing costs, while Kansas City Fed President Jeffrey Schmid favored no cut. Schmid said on Friday that he dissented out of concern that continued high inflation and signs of price pressures spreading in the economy could raise doubts about the central bank's commitment to its 2% inflation target. Dallas Fed President Lorie Logan said on Friday that the Fed should not have cut interest rates this week and Cleveland Fed President Beth Hammack said she also opposed the rate cut. Atlanta Fed President Raphael Bostic said on Friday a December rate cut is not locked in. Fed funds futures traders are pricing in a 63% probability of a cut in December, down from 93% a week ago, according to the CME Group’s FedWatch Tool. Dixon said he expects the dollar index to consolidate under technical resistance at around 102, before gaining next year when growth is likely to accelerate. “From a positioning standpoint, it's clear that investors, at least from a real money perspective, are maxed out from a short perspective, so I think it's difficult to short it,” he added. EURO, STERLING DROP The euro dropped 0.37% to $1.1522 after the European Central Bank kept interest rates unchanged at 2% for the third meeting in a row on Thursday and repeated that policy was in a "good place" as economic risks recede. The single currency has fallen 1.8% this month, as the dollar gains broadly. Sterling fell 0.14% to $1.3132, the lowest since April 14, as political pressures grew surrounding British Finance Minister Rachel Reeves. Against the euro, the pound reached its weakest since May 2023. The pound is heading for a 2.3% drop this month, while gilt yields have dropped on concern over what Reeves' November budget might mean for businesses, households and overall economic activity. Traders are also pricing in rising odds of a Bank of England interest rate cut, though the British central bank is viewed as most likely keeping rates on hold when it meets next week. "While we think GBP sentiment has turned overly bearish, we have long argued against fading the move ahead of the Budget, not to mention the tail risk of the BoE cutting rates next week," Bank of America analysts said in a report. In cryptocurrencies, bitcoin gained 1.34% to $108,972. https://www.reuters.com/world/asia-pacific/dollar-three-month-high-markets-puzzle-over-outlook-2025-10-31/

2025-10-31 02:21

TOKYO, Oct 31 (Reuters) - Japanese Minister of Finance Satsuki Katayama on Friday said the government has been monitoring foreign exchange movement "with a high sense of urgency", her strongest comment on currency since assuming the role last week as the yen sits at a nine-month low. "We have been recently seeing one-sided, rapid moves," Katayama said at a regular news conference. "The government has been monitoring, with a high sense of urgency, excessive fluctuations and disorderly movements on the currency market, including those driven by speculators." Sign up here. The yen on Thursday touched 154.45 against the U.S. dollar - the weakest since mid-February - after the Bank of Japan emerged from its policy meeting with a less hawkish tone than traders expected, while the greenback received a boost after U.S. Federal Reserve Chair Jerome Powell said a December interest rate cut was not guaranteed. Katayama's foreign exchange comments since her appointment were previously limited to general principles such as that rate movement should be stable and reflect economic fundamentals. Asked about the central bank maintaining its interest rate on Thursday, Katayama said the decision was "extremely reasonable in light of current circumstances". Regarding U.S. Treasury Secretary Scott Bessent saying in an X post that Japan's government should give the central bank scope to raise interest rates, Katayama said Bessent "didn't say anything that would be beyond what we ourselves could do". "Secretary Bessent is someone who is well-versed in Japan's systems," she said, pointing out that the central bank is independent and entrusted with the means of adjusting monetary policy. "About two weeks prior, he had exchanged views with BOJ Governor (Kazuo) Ueda, so I imagine he understood Governor Ueda's stance and probably anticipated that the BOJ wouldn't take action this time," Katayama said. https://www.reuters.com/world/asia-pacific/japan-finance-minister-warns-against-forex-volatility-after-yen-plunge-2025-10-31/

2025-10-31 01:00

Oct 30 (Reuters) - U.S. Federal Reserve Vice Chair for Supervision Michelle Bowman plans to reorganize the agency's supervision and regulation division and cut the unit's staff by about 30%, according to an email sent to staff Thursday. The reduction will be through attrition, retirements and voluntary separation incentives, according to the email seen by Reuters. Bloomberg News first reported on the planned staffing cuts. Sign up here. The Fed said earlier in the year that on a larger scale it plans to shrink its workforce by about 10% over the coming years, bringing the U.S. central bank in line with President Donald Trump's broader efforts to streamline the federal government. Powell had directed the Fed leadership to find "incremental" ways to trim operations, with a goal of shrinking the Fed's roughly 24,000-person headcount nationwide. The move also comes as the Fed moves to adjust the U.S. central bank's supervisory framework for large banks. https://www.reuters.com/sustainability/boards-policy-regulation/feds-bowman-moves-reduce-bank-supervision-unit-by-about-30-bloomberg-news-2025-10-30/

2025-10-31 00:55

Oct 31 (Reuters) - Australia's Hastings Technology Metals (HAS.AX) , opens new tab said on Friday its Yangibana joint venture project in Western Australia has agreed to negotiate for a potential offtake deal with North American rare-earths processing company Ucore Rare Metals Inc. The Yangibana rare-earths and niobium project is a joint venture with Australian billionaire Andrew Forrest's Wyloo Metals, which holds a 60% stake, and rare-earths developer Hastings, which owns the remaining 40% through its subsidiary, Yangibana Jubilee. Sign up here. "The joint evaluation of a downstream Hydromet plant in the U.S. demonstrates the efforts by Wyloo, Ucore and Hastings to access the financing and commercial opportunities arising from the recently announced rare-earths deal by the U.S. and Australian governments to jointly support "ready to go" projects," said Hastings CEO Vince Catania. The potential deal covers up to 37,000 tons a year of Yangibana's high-grade rare-earth concentrate, while both parties assess the feasibility of building a downstream hydrometallurgy plant in Louisiana. The parties will work towards executing a definitive agreement, which is expected to be finalised after June 2026, Hastings said in a statement. Shares of the Australian rare-earths developer rose as much as 19.3% to A$0.68, set for their strongest session in more than a week, if the current momentum persists. https://www.reuters.com/business/australias-hastings-negotiate-offtake-deal-with-ucore-yangibana-project-2025-10-31/

2025-10-31 00:41

Tokyo Oct core CPI rises 2.8% yr/yr vs f'cast +2.6% Index excluding fresh food, fuel rises 2.8% yr/yr in Oct Data keeps alive expectations of near-term BOJ rate hike Factory output rises 2.2% in September, beats forecast TOKYO, Oct 31 (Reuters) - Core inflation in Japan's capital accelerated in October and stayed above the central bank's 2% target, data showed on Friday, keeping alive market expectations for a near-term interest rate hike. But the increase was driven mostly by stubbornly high food costs with service-sector inflation staying modest, a sign companies were slow in passing through rising labour costs. Sign up here. The data followed the Bank of Japan's decision on Thursday to keep interest rates steady at 0.5% that drew two dissenters from the board fretting about broadening inflationary pressure. The Tokyo core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.8% in October from a year earlier, data showed on Friday, exceeding market forecasts for a 2.6% gain and accelerating from a 2.5% gain in September. A separate index for Tokyo that strips away both fresh food and fuel costs - closely watched by the BOJ as a measure of domestic demand-driven prices - rose 2.8% in October from a year earlier after a 2.5% increase in September. The increase was driven partly by a 38.4% rise in the price of Japan's staple rice and an end to subsidies for water fees. Food inflation, excluding prices for volatile fresh food, stood at 6.7% in October, slowing from 6.9% in September, the data showed. Services inflation, at 1.6% in October, was roughly steady from 1.5% in September and much slower than a 4.1% gain in goods prices, the data showed. "Core consumer inflation is expected to slow as the effects of food price rises dissipate," said Masato Koike, senior economist at Sompo Institute Plus. "While we expect the BOJ to raise interest rates in January, further hikes could become difficult," he said. The BOJ has stressed the need to see inflation driven more by solid demand and wage gains, rather than the push from raw material costs, to resume interest rate hikes. The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target. While consumer inflation has exceeded the BOJ's 2% target for well over three years, Governor Kazuo Ueda has stressed the need to tread cautiously in further rate hikes on uncertainty over the impact of U.S. tariffs on Japan's economy. In a sign companies are weathering the hit from tariffs for now, separate data released on Friday showed Japan's factory output rose 2.2% in September from the previous month, exceeding market forecasts for a 1.6% gain. The jobless rate in September was unchanged from the previous month at 2.6%, government data showed. https://www.reuters.com/world/asia-pacific/core-consumer-prices-japans-capital-rise-faster-than-expected-2025-10-30/

2025-10-31 00:33

Trump issues denial on social media that U.S. plans to attack Venezuela News media reports say U.S. plans air strikes on Venezuela Brent, WTI set to fall about 2.6% and 2% in October OPEC+ lean towards modest output boost ahead of Sunday meeting, sources say HOUSTON, Oct 31 (Reuters) - Oil prices settled slightly higher after a wild trading session on Friday, popping up as media reports said U.S. air strikes on Venezuela could begin within hours and then retreating after U.S. President Donald Trump issued a denial on social media. Brent crude futures settled at $65.07 a barrel, up 7 cents, or 0.11. U.S. West Texas Intermediate crude finished at $60.98 a barrel, up 41 cents, or 0.68%. Sign up here. "Is this Donald Trump's trick or treat?" said Phil Flynn, senior analyst for Price Futures Group. He noted that earlier this year, Trump denied reports of a planned attack on Iran before carrying out airstrikes against the Islamic Republic. "There definitely was an impact on the market when the first report of a planned attack on Venezuela came out," Flynn said. "If there is an attack over the weekend, prices will spike on Monday." The U.S. has deployed a task force centered around the nation's largest aircraft carrier, Gerald Ford, off the coast of Venezuela, far beyond the needs of attacking drug traffickers on small boats, the focus of U.S. naval activity in the Caribbean in recent weeks. "It's pretty clear something is afoot there," said John Kilduff, partner with Again Capital LLC. "For oil traders, it's a classic situation of buy now and ask questions later." The U.S. dollar was near three-month highs against major currencies, making purchases of dollar-denominated commodities such as oil more expensive. Meanwhile, sources told Reuters that Saudi Arabia, the world's top oil exporter, may reduce its December crude price for Asian buyers to multi-month lows, sounding a bearish note. Oil slipped after an official survey showed China's factory activity shrank for a seventh month in October. Brent and WTI are set to fall 2.6% and 2%, respectively, in October with the Organization of the Petroleum Exporting Countries and major non-OPEC producers ramping up output. More supply will also cushion the impact of Western sanctions disrupting Russian oil exports to its top buyers China and India. A Reuters survey forecast Brent will average $67.99 per barrel in 2025, about 38 cents above last month's estimate. WTI is expected to average $64.83, slightly above September's estimate of $64.39. OPEC+ is leaning toward a modest output boost in December, people familiar with the talks said ahead of the group's meeting on Sunday. Kilduff said most of the OPEC+ members except for Saudi Arabia were unable to add much to their production. "Pretty much there is nothing they can add that is going to be meaningful beyond what the Saudis can do," Kilduff said. In August, Saudi Arabia's crude exports hit a six-month high of 6.407 million bpd, data from the Joint Organization Data Initiative showed. A U.S. Energy Information Administration report also showed record production of 13.6 million bpd last week. Trump said on Thursday that China has agreed to begin the process of purchasing U.S. energy and that a very large-scale transaction may take place involving the purchase of oil and gas from Alaska. However, analysts remained skeptical as to whether the U.S.-China trade deal will boost Chinese demand for U.S. energy. https://www.reuters.com/business/energy/oil-heads-third-monthly-decline-strong-dollar-ample-supply-weigh-2025-10-31/