Treasury yields continue on the rise, supporting USD and pressuring the equity market globally; BoJ to conclude its meeting today, potentially easing its rate control

• USD regained strength on Friday, supported by the rising yields and falling stocks
• Asian stocks fell, oil encountered sell-off
• BoE held interest rate at 0.1%, giving GBP a slight upbeat against EUR
• BoJ to conclude its policy meeting today, with likelihood to ease the rate control

USD regained some strength again on Friday, supported by the skyrocketing Treasury yields, which have climbed to 1.754%, above the one-year top. Despite Powell’s statement that the Fed will not raise interest rates anywhere sooner than it sees substantial improvements in the economy, yields continue to hike. The market was probably expecting some more aggressive measures to actively lower the yields, rather than a sense of assurance. Nevertheless, FOMC pledged this week that a near-term inflation would only be temporary and that they had projected the strongest growth in nearly 40 years.

Asian markets no Friday followed the US’s fall, and crude oil has seen the sharpest setback in months by plunging 7% overnight, currently trading at $63.36 per barrel at press time. US refineries are on the way to recover from February’s unexpected cold weather in Texas, and this might be one of the reasons that are causing the crude oil price to drop.
GBP received some support earlier today from BoE’s decision to hold interest rates steady at 0.1%, in line with expectations. It will also maintain its target on asset purchases at $1.2 trillion. The move largely follows the Fed’s dovish stance. Since the onset of the pandemic, BoE has cut rates twice from 0.75%, and there had been rumors earlier that the rates would enter the negative territory. However, BoE said that British lenders would need at least six months to plan for the environment and that it was not planning to implement such measures at the moment.
JPY also managed to get some support from a Nikkei report that, BoJ was expected to slightly widen the band on interest rates around 0%. Aside from easing the control over the rates, markets are also anticipating that BoJ will shrink the scale on its ETF purchases, a practice that has drawn a lot of criticism for distorting market pricing. The policy meeting will conclude today, and we will see the rate decision very likely soon.