During the last week, investors have kept their eyes on the US's Federal Open Market Committee (FOMC) and the Bank of Japan meetings.
The United States hasn't announced any increase to interest rates due to the unpredictable fluctuations and volatility of the global economy. Despite the fact that the US economy has been showing signs of recovery, especially for its labour sector (the number of citizens requesting unemployment benefits have been recorded to be at its lowest in 5 months). From the latest Federal Reserve System (FDR) meeting, it has been hinted that there would be only two increases to the interest rate this year (as compared to four times in 2015), this is expected to occur in the second-half of this year. Asian currencies have strengthened as opposed to the American dollar due to delayed interest rate enhancements.
As for Japan, the Bank of Japan did not issue any new monetary measures despite:
- An unexpected inflation of up to 2%
- The Japanese economy experienced a contraction of 1.1% in the fourth trimester of 2015
- The yen strengthening since the beginning of 2015