Global Markets Steady Amid Central Bank Surprises and Middle East Tensions
Global financial markets remained steady as major banks, including the Bank of Japan, maintained interest rates while geopolitical tensions simmered in the Middle East. Analysts anticipate cautious moves from central banks, with investors focusing on the Federal Reserve’s upcoming policy decision and its implications for future economic forecasts.
The dollar remained steady on Tuesday as the yen rose slightly following the Bank of Japan's monetary policy decision. Governor Kazuo Ueda highlighted trade uncertainties in a press briefing, but the BOJ kept rates unchanged. The bank plans to slow its balance sheet downsizing next year amid rising global risks like the Middle East conflict and U.S. tariffs.
The yen experienced volatility during Ueda's announcement but improved by 0.1% to 144.67 per dollar later. Tohru Sasaki, chief strategist at Fukuoka Financial Group, commented on the BOJ's large holdings of Japanese government bonds, suggesting that purchasing reduction is due to market volatility and global economic uncertainties.
Meanwhile, the euro remained steady at $1.155675, and the pound fell 0.1% against the dollar, influenced by recent U.S.-UK tariff agreements. Global attention also shifted to the escalating Israel-Iran conflict, impacting market sentiment. The Federal Reserve's upcoming policy decision is now a focal point for assessing future rate paths.
(With inputs from agencies.)
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