BOJ Ends Negative Rates, RBA Softens Bias, Fed to Hold Steady

The Bank of Japan (BOJ) has ended eight years of negative interest rates, marking a significant shift in monetary policy. The BOJ's Policy Board, led by new Governor Kazuo Ueda, set the overnight call rate as its new target and will guide it within a range of 0-0.1%. This move signals a departure from the ultra-easy monetary policy that Japan has maintained for years.

Japanese financial markets reacted with volatility to the BOJ's decision. The Nikkei index fluctuated between gains and losses, while the yen weakened against the dollar. The broader MSCI index of Asia-Pacific shares outside Japan also declined.

Meanwhile, the Reserve Bank of Australia (RBA) held interest rates steady, but softened its tightening bias. The RBA indicated that it is not ruling out any policy options, including rate cuts. The Australian dollar slipped against the U.S. dollar following the decision.

In contrast to the BOJ and RBA, the U.S. Federal Reserve (Fed) is widely expected to hold rates steady at its upcoming meeting. However, market attention will be focused on the Fed's economic projections and comments from Chair Jerome Powell. Traders have reduced their bets on rate cuts this year, with markets now pricing in only 71 basis points of easing.