BOJ soon to alter monetary policy, yen rises

Heightened recession fears drag oil prices

By Nadia Elbilassy | @Nadia Elbilassy | 26 April 2023

Midday Market update
  • Euro down on end of month profit taking orders

  • Fears of a close enough recession drag oil down

  • AUD consumer price index declines to 6.3%, compared to the previous reading of 6.8%.

Recession fears weigh on oil prices

Oil prices retreat from the upward trendline after a few weeks of notable gains, as recession fears weigh despite OPEC+ intervention.

Increased recession concerns due to the prolonged tightening cycle of monetary policies by major central banks, including the Fed. Continues to raise fears of a slowdown in economic activity in the US, the world's largest consumer of crude oil, as well as in the Eurozone, leading to reduced demand for oil.

Investors are closely monitoring the upcoming monetary policy committee meetings of the US Federal Reserve and the European Central Bank, scheduled for the first week of the next month.

Oil prices experienced a significant decline of over 2% in trading yesterday, WTI was last seen near $77 per barrel. And Brent near $81.

Japan’s Finance Minister latest statements moves the yen

First Republic Bank announces large decrease in deposits by $100 billion and safe haven demand boasts including the Japanese yen, also supported by the latest statement from Japan’s finance minister whom stated that they will soon reevaluate Japan’s monetary policy. Earlier this month, the Governor of the BoJ, Kazuo Ueda indicated that consumer inflation in Japan is likely approaching its peak and is expected to gradually start slowing down.

The USD/JPY pair began trading today with a slight decline against the Japanese yen, trading near levels of 133.75 yen.