Yen climbs after Bank of Japan raises interest rates

BOJ

The Bank of Japan raised interest rates by 15 basis points and announced plans to gradually halve its monthly bond purchases by 2026, signaling a shift from its ultra-dovish policy and quantitative easing measures.

The BOJ increased its benchmark short-term interest rate by 15 basis points to a range of 0.1% to 0.25%. Market expectations had been divided between maintaining current rates and a potential hike of 10-15 basis points.

The central bank stated it will decrease its Japanese Government Bond purchases to 3 trillion yen from the current pace of 6 trillion yen by early 2026, in line with general consensus.

Earnings

Meanwhile, Microsoft shares declined after its fourth-quarter cloud revenue growth missed Wall Street expectations, despite increased spending on investments aimed at boosting growth.

The company's shares fell over 2% in premarket trading today after reporting earnings per share of $2.95 on revenue of $64.7 billion.

Azure, Microsoft's cloud business, grew by 29%, falling short of analyst estimates of 30.2%. This also represented a slowdown from the 31% growth reported in Q3.

Gold

Gold prices continued to rise today, on rising Middle Eastern tensions besides from benefiting from a softer dollar ahead of Powells speech later today.

Prices surpassed $2,400 and are hovering around $2,420 as of the current time.