There is even talk that the Bank of Japan may change its ultra-loose stance on interest rates
The European Central Bank headquarters building is seen in Frankfurt, Germany. File photo: REUTERS/RALPH ORLOWSKI
The MSCI’s benchmark for global stocks hovered around parity. By 09:02GMT, the index had risen 0.1% after a heavy week of interest rate increases sent it on Friday to its lowest point since November 10. “Except for the BOJ and perhaps the Bank of England, there’s little confidence in the other central banks. It’s unrealistic to keep raising rates at this pace next year,” he added.
Japan’s Nikkei fell 1.05% to a six-week low and the yen rose 0.5% to ¥135.90/dollar. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.15%. The yen has been the worst-performing Group of 10 currency this year, with a 15% loss against the dollar, driven mainly by the gap between rising US rates and anchored Japanese rates. Five-year Japanese government bond yields hit a nearly eight-year high.
Last week the Fed projected more interest rate hikes ahead, leaving traders fretting that they are already high enough to start hurting economic growth. Ten-year treasury yields stood at 3.5277%.
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