Stocks bounce, yen gains vs dollar; talk of BOJ policy tweak

If the BOJ does not do anything tomorrow and just wait until December, I think the dollar jumps right back versus the yen, a chief market strategist says

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Global stock indexes rose on Monday, with US stocks rallying more than 1 percent after recent sharp declines, while the yen rose to a two-week high against the dollar after a report that the Bank of Japan (BOJ) is considering tweaking its yield curve control policy.

Oil prices settled more than 3 percent lower, partly as fears eased about the Israel-Hamas war disrupting supply from the region.

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The Nikkei report, that the BOJ is considering adjusting its yield curve control policy to allow the 10-year Japanese government bond yield to rise above 1 percent, pushed the yen to 148.81 per dollar, its strongest level since Oct. 17.

The greenback was down 0.4 percent at 149.05 yen.

The BOJ kicked off its two-day monetary policy meeting Monday. The recent surge in global interest rates has heightened pressure on the BOJ to change its bond yield control policy.

The Federal Reserve and Bank of England are also meeting this week. The US monthly jobs report is due on Friday.

“If the BOJ does not do anything tomorrow, which I think that’s what economists expect and just wait until December, I think the dollar jumps right back versus the yen,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

The dollar index fell 0.469 percent, with the euro up 0.51 percent at $1.0618.

Stock investors also are closely monitoring quarterly earnings, with several big companies including Caterpillar and Apple due to report this week.

The Dow Jones Industrial Average rose 510.78 points, or 1.58 percent, to 32,928.37, the S&P 500 gained 49.41 points, or 1.20 percent, at 4,166.78 and the Nasdaq Composite added 146.47 points, or 1.16 percent, at 12,789.48.

Stocks posted losses for last week as economic data seemed to support the “higher for longer” interest rate scenario.

The pan-European STOXX 600 index rose 0.36 percent and MSCI’s gauge of stocks across the globe gained 0.87 percent.

Benchmark 10-year note yields were last at 4.88 percent, up on the day. They are holding just below a 16-year high of 5.021 percent reached last Monday.

In energy, US crude fell $3.23 to settle at $82.31 a barrel, while Brent dropped $3.03 to $87.45.

Spot gold dropped 0.4 percent to $1,997.86 an ounce.

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