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1. Global semiconductor stocks suffered a massive sell-off on Thursday, with investors questioning the sustainability of the AI-driven rally. The South Korean KOSPI fell over 6%, triggering another circuit breaker during trading; SK Hynix fell over 11%, the Nikkei 225 fell 2.79%, and Kioxia fell 15%. A-shares also saw a significant correction, with the Shanghai Composite Index falling below 3900 points. 2. All three major U.S. stock indexes closed lower. The Dow Jones Industrial Average fell 0.2% to 52,552.97 points, the S&P 500 fell 0.51% to 7,533.77 points, and the Nasdaq Composite fell 1.47% to 25,881.95 points. Goldman Sachs fell nearly 5%, and Google fell over 4%, leading the decline in the Dow. The Wind US Tech Big Seven Index fell 1.31%, with Facebook and Nvidia falling over 2%. SpaceX fell over 3%. Semiconductor and memory stocks also plummeted, with Seagate Technology falling 10% and Western Digital falling over 9%. 3. European stock indices closed mixed. The German DAX index fell 0.34% to 24,915.49 points, the French CAC40 index fell 0.05% to 8,377.86 points, and the UK FTSE 100 index rose 0.54% to 10,572.24 points. 4. International precious metals futures generally closed lower. COMEX gold futures fell 1.77% to $3,979.90 per ounce, and COMEX silver futures fell 2.90% to $55.77 per ounce. 5. The WTI crude oil futures contract closed down 0.03% at $79.58 per barrel; the Brent crude oil futures contract fell 0.11% to $84.86 per barrel.Federal Reserve Vice Chairman Jefferson: If the increased productivity of artificial intelligence can reduce production costs sooner, inflation may face downward pressure.Federal Reserve Vice Chairman Jefferson: The economic shock caused by artificial intelligence may have a lasting impact on supply and demand.Federal Reserve Vice Chairman Jefferson: A series of rapid shocks could cause inflation to solidify and inflation expectations to lose their anchor.Federal Reserve Vice Chairman Jefferson: We cannot look at each factor in isolation; we must consider the overall economy when making policies.

USD/JPY falls to 146.00 as the DXY weakens and interest in BOJ policy rises

Alina Haynes

Oct 27, 2022 15:28

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During the Asian session, in response to negative signals from the US dollar index, the USD/JPY pair plunged below 146.00. (DXY). Following Wednesday's low of 146.22, the asset's two-day downward trend has extended. The main index is reaching the bottom of Monday's knee-jerk reaction near 145.77 as it continues to decline.

 

The dollar bears are facing a severe sell-off due to the positive market sentiment. The risk-sensitive currencies have benefited from an increase in risk appetite. The US dollar index (DXY) has struck a new monthly low of 109.56 and is anticipated to stay volatile until the release of crucial US economic data.

 

The increased demand for U.S. government bonds has resulted in a decline in yields. This is due to the global markets' increased confidence. The yield on 10-year United States Treasury notes has decreased to 4%.

 

According to estimates, the Gross Domestic Product of the United States expanded by 2.4% in the third quarter. Despite the ultra-hawkish monetary policies of the Federal Reserve (Fed) and the previously disclosed 0.6% fall in growth, forecasts indicate a positive growth rate.

 

In addition, US Durable Goods Orders data will continue to be a key point. Compared to a reduction of 0.2%, it is projected that economic statistics will increase by 0.6%. Notable is the increase in core inflation, which includes oil and food prices. In spite of this, the predicted increase in demand for durable goods in the United States demonstrates healthy household demand.

 

Investors in Tokyo are anticipating the Bank of Japan's (BOJ) interest rate decision on Friday. In view of the shocks to foreign demand, BOJ Governor Haruhiko Kuroda will continue an ultra-loose monetary policy to stimulate the outlook for economic development. In addition, Japanese policymakers are anxious that the inflation rate could go below 2%; hence, an extremely liberal policy is the best alternative.

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