© Reuters. A huge electrical stock ticker board is seen inside a building in Tokyo, Japan, December 30, 2022. REUTERS/Issei Kato
By Caroline Valetkevitch
NEW YORK (Reuters) – 10-year US Treasury yields fell to a four-month low and eased lower on Wednesday as data showed US retail sales fell more than expected in December while the yen it hardly changed in the wake of the Bank of Japan’s decision to keep interest rates ultra-low.
A global stock index rose, but Wall Street shares were little changed after opening higher.
Falling US retail sales, coupled with declining inflation, could encourage the Federal Reserve to further reduce the pace of interest rate hikes next month.
A separate report showed that US producer prices also fell more than expected in December.
Earlier, the Bank of Japan maintained its ultra-loose policy, including a bond yield cap, defying market expectations that it would phase out its massive stimulus program due to mounting inflationary pressures.
The decision sent the yen lower, and investors canceled their bets based on expectations that the central bank would review its yield control policy.
But in morning US trading, the dollar was little changed against the yen. The US dollar index was down 0.5%.
“The PPI numbers and retail sales show that there are disinflationary pressures,” said Juan Perez, director of operations for Monex USA in Washington.
The Japanese 10-year yield also earlier plunged as much as 14 basis points to 0.36%, which would have been the biggest one-day drop since September 2003, before rising again to 0.41%. The yield was 0.51% before the BOJ decision.
On Wall Street, it fell 123.72 points, or 0.36%, to 33,787.13, lost 1.74 points, or 0.04%, to 3,989.23 and added 13.50 points, or 0.12%, to 11,108.61.
The pan-European index rose 0.44% and MSCI’s worldwide stock gauge gained 0.30%.
Benchmark 10-year notes fell to 3.375%, the lowest level since September 13. Two-year yields hit 4.072%, the lowest level since Oct. 4. points.
In the energy market, it recently rose 1.92% to $81.72 a barrel and was at $87.21, up 1.5% on the day.
The US Department of Justice said it will “announce a major international cryptocurrency enforcement action” on Wednesday.
it was last down 0.7%.
