• BoJ kept rates unchanged at -0.1% as expected and maintained QQE with Yield Curve Control as expected
• Asian equities traded mostly higher across the board despite the negative lead from Wall Street. Nikkei 225 outperformed amid softer JPY
• Looking ahead, highlights include US housing starts, Uni. Of Michigan confidence and Fed’s Kaplan

ASIA

Asian equity markets were mostly higher after the region sspanugged off the negative lead from Wall St, where tech resumed its sell-off and participants pondered over the recent Fed rate hike as well as ongoing political woes. ASX 200 (+0.3%) and Nikkei 225 (+0.8%) gained from the open, with exporter names in the latter underpinned by a weaker currency. Shanghai Comp. (-0.3%) and Hang Seng (+0.5%) were mixed with the mainland underperforming as a firm liquidity operation by the PBoC, was overshadowed by credit bubble concerns. 10yr JGBs were relatively flat with some marginal upside seen tspanoughout the session, while today’s BoJ policy decision also provided no fresh insights with the bank sticking to its policy framework.

BoJ kept rates unchanged at -0.1% as expected and maintained QQE with Yield Curve Control as expected via 7-2 votes. BoJ maintained annual pace of JGB holdings at JPY 80tln and to target 10yr yields at around 0%, while it also kept its economic assessment unchanged in which it stated that the economy turned to moderate expansion. (Newswires)

PBoC injected CNY 30bln in 7-day reverse repos, CNY 160bln in 14-day reverse repos and CNY 100bln in 28-day reverse repos, for a net weekly injection of CNY 410bln vs. Prev. net drain of CNY 10bln last week. (Newswires)

PBoC set CNY mid-point at 6.7995 (Prev. 6.7852)

EUROPE/UK

Greece is said to have reached a bailout deal with creditors with the full disbursement expected at the beginning of July, while IMF's Lagarde suggested that the disbursement is contingent upon Greek debt relief. (Newswires)

FX

FX markets were largely uneventful amid a lack of drivers and after a monotonous BoJ policy announcement. As such, the overnight lull provided currencies an opportunity to nurse post-FOMC losses against the greenback, with GBP continuing to benefit from yesterday’s BoE split vote where 3 of 8 members called for a hike, while AUD/USD rebounded and eyed the 0.7600 handle to the upside. Conversely, an improved risk appetite spurred further outflows from safe-haven JPY with USD/JPY extending above 111.00, while the BoJ’s policy decision failed to trigger any sustained reaction with policy kept unchanged as expected.

COMMODITIES

Commodities remained quiet overnight amid a lack of drivers with WTI crude futures firmly below USD 45/bbl. Meanwhile, gold (-0.1%) lingered near 3 week lows amid a firmer greenback in the wake of this week’s hawkish FOMC, while copper traded sideways alongside similar subdued price action across the complex and dampened risk tone in its largest consumer China.

US

Tsy yields were higher following yesterday’s Fed hike; the belly of the curve underperformed, where yields on 5s were higher by around 4bps; short-end and long-end yields were up by around 1bps. The 2s10s spread managed to widen back to levels above 80bps; 5s30s, however, flattened by around 5bps, but remained above the 100bps mark. Sep 17 T-Note futures settled 9 ticks lower at 126.20+ last.

US Special Counsel Mueller is said to probe business dealings of US President Trump's son-in-law and White House Advisor Jared Kushner. (Newswires)

Fed approved discount rate increase by 3 regional Fed banks. (Newswires)