[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.
![[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240919/a60abf4058ff7a9efb1cb87cca5e77d5.png/big?area=105&is_public=true)
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Here are the key points of this morning's report.
• [Tokyo stock market forecast range] ¥6,200,000.03 - ¥6,600,000.03 (closing price on the 18th: ¥6,380,000.03)
• FOMC significantly lowers interest rates, with hawkish rate cuts by opposing votes
- The USD/JPY is moving sharply downwards as a result of a significant interest rate cut. Chairman Powell emphasized a cautious approach.
- The US Federal Reserve's interest rate cut received a response from both the Democratic and Republican camps.
- US housing starts increased significantly in August, exceeding expectations.
- The EU court has withdrawn the fine imposed on Google.
- Microsoft avoids EU investigation over Inflection AI.
moomoo News Kei
• FOMC significantly lowers interest rates, with hawkish rate cuts by opposing votes
- The USD/JPY is moving sharply downwards as a result of a significant interest rate cut. Chairman Powell emphasized a cautious approach.
- The US Federal Reserve's interest rate cut received a response from both the Democratic and Republican camps.
- US housing starts increased significantly in August, exceeding expectations.
- The EU court has withdrawn the fine imposed on Google.
- Microsoft avoids EU investigation over Inflection AI.
moomoo News Kei
Market Overview
![[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240919/477d5b65101b112be35b5c4fa520b2cb.jpg/big?area=105&is_public=true)
On the 18th, the US stock market declined. The Dow Jones Industrial Average continued to fall, the S&P 500 Index fell for the first time in 8 business days, and the Nasdaq Composite Index also fell. After the Federal Reserve announced a 50 basis point (bp) rate cut, US stocks were bought initially but later selling prevailed. The Tokyo stock market on the 19th is expected to have a predominance of buying, with a high likelihood of the Nikkei Stock Average continuing to rise.
![[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240919/3ae5a314cae2e30a69bf324df1bff52a.jpg/big?area=105&is_public=true)
Top News
FOMC significantly lowered interest rates, hawkish rate cut with opposing votes.
The Federal Reserve Board (FRB) has decided to reduce the policy interest rate (Federal Fund FF interest rate target) by 0.50% points to 4.75-5.00% at the Federal Open Market Committee (FOMC) meeting. Director Bowman supported a slight decrease of 0.25% and the decision was made by a vote of 11 to 1. While the judgment of the labor market was lowered, the judgment that the economy continues to perform well was maintained. The presence of dissenting votes makes this decision somewhat hawkish.
Related articles
•FRB cuts interest rates by 0.5 points to avoid cooling down the labor market.
•[FOMC Statement] Points [Speeches by important figures, economic indicators]
•Market voices: Will the FRB's interest rate cut be at a gradual pace in the future?
FOMC significantly lowered interest rates, hawkish rate cut with opposing votes.
The Federal Reserve Board (FRB) has decided to reduce the policy interest rate (Federal Fund FF interest rate target) by 0.50% points to 4.75-5.00% at the Federal Open Market Committee (FOMC) meeting. Director Bowman supported a slight decrease of 0.25% and the decision was made by a vote of 11 to 1. While the judgment of the labor market was lowered, the judgment that the economy continues to perform well was maintained. The presence of dissenting votes makes this decision somewhat hawkish.
Related articles
•FRB cuts interest rates by 0.5 points to avoid cooling down the labor market.
•[FOMC Statement] Points [Speeches by important figures, economic indicators]
•Market voices: Will the FRB's interest rate cut be at a gradual pace in the future?
The USD/JPY is making a sharp downward move as a significant interest rate cut is implemented. Chairman Powell emphasizes a non-urgent approach.
A significant downward trend in the USD/JPY is observed. In the afternoon, the results of the FOMC were announced, with a substantial 0.50% interest rate cut. Immediately after the announcement, the USD/JPY plummeted rapidly from around 142 yen to 140.50 yen. However, as Chairman Powell's press conference began, this decline quickly reversed and returned to the 142 yen level.
A significant downward trend in the USD/JPY is observed. In the afternoon, the results of the FOMC were announced, with a substantial 0.50% interest rate cut. Immediately after the announcement, the USD/JPY plummeted rapidly from around 142 yen to 140.50 yen. However, as Chairman Powell's press conference began, this decline quickly reversed and returned to the 142 yen level.
The rate cut by the Federal Reserve Board of the United States is met with reactions from both the Democratic and Republican camps.
President Joe Biden and Vice President Kamala Harris welcomed the Federal Reserve Board (FRB)'s 0.5-point reduction in the target federal funds (FF) rate. On the other hand, Republican Vice Presidential candidate Senator JD Vance (Ohio) pointed out that it would not have a significant impact on voters' decisions.
President Joe Biden and Vice President Kamala Harris welcomed the Federal Reserve Board (FRB)'s 0.5-point reduction in the target federal funds (FF) rate. On the other hand, Republican Vice Presidential candidate Senator JD Vance (Ohio) pointed out that it would not have a significant impact on voters' decisions.
US housing starts surged in August, exceeding financial estimates.
The U.S. Department of Commerce announced that the seasonally-adjusted annual rate of housing starts for August increased by 9.6% from the previous month to 1.356 million units. The decline in mortgage interest rates seems to be providing tailwinds for the housing construction industry.
The U.S. Department of Commerce announced that the seasonally-adjusted annual rate of housing starts for August increased by 9.6% from the previous month to 1.356 million units. The decline in mortgage interest rates seems to be providing tailwinds for the housing construction industry.
The EU court has revoked the fine imposed on Google.
The European Union (EU) court has overturned the European Commission's decision to impose a fine of 1.49 billion euros (approximately 230 billion yen) on Google for potentially restricting the advertising of competing companies. This is a significant victory for Google.
The European Union (EU) court has overturned the European Commission's decision to impose a fine of 1.49 billion euros (approximately 230 billion yen) on Google for potentially restricting the advertising of competing companies. This is a significant victory for Google.
Microsoft avoids EU investigation over Inflection AI.
The European Union's antitrust authorities have revealed that several countries in the region have withdrawn their requests to investigate the relationship between Microsoft and Inflection AI, a startup specializing in artificial intelligence (AI). This allows Microsoft to avoid a formal investigation into its partnership with Inflection AI.
The European Union's antitrust authorities have revealed that several countries in the region have withdrawn their requests to investigate the relationship between Microsoft and Inflection AI, a startup specializing in artificial intelligence (AI). This allows Microsoft to avoid a formal investigation into its partnership with Inflection AI.
![[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240919/b6c5ef44aeee18a73d6fa2408a26d7b6.jpg/big?area=105&is_public=true)
Foreign exchange
Major market events
![[Morning Report] FOMC significantly lowered interest rates to avoid cooling labor market, resulting in the USD/JPY moving downward to the 142 yen level.](https://sgsnsimg.moomoo.com/sns_client_feed/181250687/20240919/9cc17c942b4e2386df3f03d9e55c2a3e.jpg/big?area=105&is_public=true)
Source: Dow Jones, MINKABU, Fisco, Bloomberg, Wealth Adviser, moomoo
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マ・ナ・ブ : #Bold financial estimates by amateurs
Could it be that the market would have risen significantly if a 25bp interest rate cut had been expected instead? The American economy is not deteriorating to that extent, so I don't think there will be a big decline. It's a shame that I waited for a decline, but it didn't happen. ~
Yesterday, I predicted a 50bp interest rate cut and expected the market to fluctuate significantly. While the 50bp interest rate cut was accurate, the market did not move much. The decision to cut interest rates by 50bp was correct, right?
大負けネコ : Hmm? From last month's 'bad feeling' about the conclusion of the 'FOMC meeting, including Chairman Powell and other members' ⇒ 'The US economy is solid', despite appearing to be, due to indicators such as a decline in the manufacturing index and an increase in unemployment benefit claims, there was a somewhat hawkish 'long-term interest rate cut' that exceeded the market's expectations of 0.25% with a sudden 0.50% rate cut and mention of additional rate cuts within the year, leading to a 'weakening dollar=strong yen', progressing towards 'yen strength due to speculative involvement', resulting in an 'accelerating high yen exchange rate' and 'reversal of the yen carry trade', causing 'Japanese stocks to fall again', although preparations were made for various scenarios, it seems to have ended up as unnecessary worry. Due to the 'reduction of the US rate cut by 0.50%', the 'interest rate differential between Japan and the US', temporarily led the dollar to be sold at night, heading towards 'strong yen direction', but 'dollar weakness halted, paused'? This morning, the 'Nikkei Stock Average Futures are rising', the market is moving based on expectations, but will it really end with 'weak yen and strong dollar'? Just a week ago, 'analyst predictions' were around '0.25% rate cut prediction=about 73%', but within a week it turned into a 'reversal prediction' leading to a '0.50% rate cut'. It seems like Powell also made remarks like 'a 0.50% rate cut is not normal', so will it gradually transition to a 'strong yen phase' starting from tomorrow to next week? Truly, I don't know - the influence of 'analysts' on the market. For now, if 'Japanese stocks rise with a weak yen', I placed some 'buy orders' accordingly, but due to the fluctuations like 'rise⇒fall⇒rise' yesterday, I honestly 'cannot trust it'. Well, I will 'keep an eye' on the market principles being manifested. If my 'bad feeling turns out to be wrong', that's fine. Let's refocus and do my best!
株ドリーム 大負けネコ : Like Mr. Big Loss Cat, I was also concerned about further unwinding of yen carry trades. However, after reviewing Powell's press conference summary, I thought, "Indeed, he is accustomed to dialoguing with the market... it might just be needless worry...".
However, this week, I will stay put and continue to assess the situation. I am still concerned that there may be further confusion after the Bank of Japan's monetary policy decision meeting and subsequent press conference... (poorly communicated conference)
So, today I also took some profits from long-held positions and increased my cash position.
大負けネコ 株ドリーム : Oh! Comrade? As expected, should we be wary of the "yen carry reversal= yen high concern" from the "flow until last week"?
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That's good. I wonder if my "concern about the impact of interest rate cuts" was just a common thought. I also recommended to my friends to "hold onto extra funds" for "this week to next week is dangerous". Anyway, today I will re-enter the "Japanese stock bargain sale" and also reallocate stocks to "secure extra funds".
"Grandpa Powell" made a clear statement and suggested future directions for the interest rate cuts, but there are concerns about what "Governor Ueda Bomb" and "hawkish BOJ members" will say and where. Please "pay attention to Japan's economic indicators and make judgments" for us~
No more "doubts", please forgive me~
株ドリーム 大負けネコ : Ueda's 'BOMB'... I see, haha. Well, if we delve into it, it eventually comes down to the consequences of unconventional monetary easing. It was supposed to be that a BOJ alumnus would become the governor due to the task rotation, but everyone ran away... In such times, I have respect for the BOJ governor who dared to pick up the chestnuts out of the fire. (However, so far, I haven't been able to get rid of the impression that he lacks the ability to communicate effectively with the market...) Anyway, because it was 'unconventional,' individual investors like us need to always be prepared for the possibility of a reversal in yen carry trades. We're only 50 percent through, after all...