The yen strengthened on expectations of further tightening of the monetary policy of the Bank of Japan - 21.12.2022

On Tuesday, the US dollar index fell, but failed to reach a new low. This was mainly due to the strong strengthening of the Japanese yen (+3.7% against the US dollar per day). The Bank of Japan kept its rate negative at -0.1% but widened the range of government bond yields from 25 basis points to 50. As a result, the Japan 10-Year Bond yield soared from 0.25% per annum to 0.45%. This increased the demand for the yen. In addition, investors are now counting on an increase in the BoJ rate. This may happen after the election of its new leader at the end of March 2023. For the US currency, weak economic data on the housing market (Building Permits, Housing Starts) for November became an additional negative yesterday. Moreover, United States Building Permits (1.342 million) turned out to be the lowest since June 2020, when there was an epidemic of coronavirus. Today in Canada there will be significant data on inflation in November.

Bitcoin quotes have been hovering in a narrow range around $16,600 for the 6th week in a row. In general, it can be assumed that the crypto market very calmly survived the FTX bankruptcy, in which, according to preliminary estimates, about $8 billion of client funds evaporated.

Yesterday, US stock indices updated local lows, but then rose at the end of the day. It can be noted that if there is no "New Year's rally", then the S & P 500, Dow and Nasdaq this year will show the maximum decline since 2008, when there was a global economic crisis. Yesterday, Tesla Inc shares fell 8% due to a decrease in the assessment of their target price by some brokerage companies and banks. Quotes of oil companies Halliburton Company (+3.8%), Schlumberger (3.9%) and ConocoPhillips (+2%) rose due to the stabilization of oil prices. S&P 500 Energy (+1.5%) became the growth leader among sectoral indices. Today in the US will be published economic data: CB Consumer Confidence and Existing Home Sales. Their forecasts are positive. Futures for US stock indices are now in positive territory.

On Tuesday, oil continued to trade in a narrow range for the 2nd day in a row due to two factors. On the one hand, according to the American Petroleum Institute (API), US oil inventories fell by 3.1 million barrels over the week. This supports quotes. On the other hand, an increasing number of coronavirus patients in China may lead to the resumption of quarantine and a decrease in demand for motor fuel.

Quotes of natural gas in Europe on ICE Dutch TTF fell from $1,700 per 1,000 cubic meters to $1,090 in 2 weeks. Recall that $1,000 is a psychological support level.