​EBC Markets Briefing | Yen eases; IBM down sharply on AI disruption

The yen was weaker after the Nikkei newspaper said US authorities took the lead in conducting so-called rate checks last month. Washington's latest tariff threats are clouding the outlook for global trade.

Japan's headline inflation rate fell to 1.5% in January, its lowest level since March 2022. In January, the BOJ upgraded its core inflation forecasts for fiscal 2026 to 1.9% - short of the 2% target.

The inflation reading came after GDP growth of 0.1% in Q4 on Monday, narrowly avoiding a technical recession. Despite so, it remains uncertain whether the slowdown could delay rate hikes.

The central bank may raise interest rates as soon as March if the yen renews its slide ahead of a US-Japan summit expected to be held during the month, former central ‌bank board member Makoto Sakurai said.

A majority of economists polled by Reuters see benchmark interest rate at 1% by end-June, while markets have priced in a roughly 70% ‌chance of a hike by April even after Takaichi's landslide victory.

Finance minister Satsuki Katayama said in January she would not rule out any options to counter excessive foreign exchange volatility including such joint interventions.

The yen slipped following formation of a double-top pattern, but the downside momentum appeared to be easing. The path of least resistance is an increase to 154 per dollar.

Asset recap

As of market close on 23 February, among EBC major products, PayPal shares led gains. The company has been thrust into the spotlight, sparking a wave of takeover interest from potential buyers.

IBM shares tumble after AI startup Anthropic unveiled a disruptive new tool aimed squarely at the heart of the tech giant's legacy business. Investors are rethinking the future of legacy software consulting.

The shock also pushed First Trust ISE Cloud Computing Index Fund lower. Software stocks tanked again Meanwhile, gold prices climbed above $5,200 for the first time in nearly a month.

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