Market Information Tuesday 17 June 2025

The Bank of Japan announced it will slow the pace of its government bond purchase cuts starting April 2026, while keeping its benchmark interest rate steady at 0.5% amid concerns about economic growth. It plans to reduce bond purchases by 400 billion yen per quarter until March 2026, then ease to 200 billion yen per quarter through March 2027, aiming to stabilize the market and improve bond market functioning. The decision, which met expectations, briefly boosted the Nikkei 225 and strengthened the yen, while pushing up 10-year bond yields.

Gold has surged ahead as the top safe haven in 2025, outshining traditional assets like the U.S. dollar, Treasuries, the Japanese yen, and the Swiss franc, with prices up 30% year-to-date. Investors are flocking to gold amid growing doubts about fiscal stability, geopolitical tensions, and erratic policymaking—especially in the U.S., where debt concerns and Trump-era tariffs have shaken confidence in Treasurys. Unlike government-backed assets, gold carries no counterparty risk and is valued for being apolitical, liquid, and independent of economic mismanagement. Central banks have reinforced this shift, with gold now overtaking the euro as the world’s second-largest reserve asset.

Asia-Pacific markets traded mostly lower on Tuesday amid investor caution over the escalating Israel-Iran conflict, following U.S. President Trump’s call for an immediate evacuation of Tehran and his early exit from the G7 summit. Despite geopolitical jitters, analysts including Fitch and Lombard Odier believe the confrontation will remain limited and short-lived. Still, uncertainty and rising energy costs could weigh on growth and inflation. Japan’s Nikkei rose modestly after the Bank of Japan held rates steady and signalled slower bond purchase cuts, while markets in China, South Korea, Australia, and India mostly declined.

The 6M Euribor increased with 1 basis point to 2.06% compared to previous business day. The 10Y Swap is unchanged at 2.56% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.