BoJ crashes the party with the announcement of upcoming ETF sales

Show notes

US markets hit fresh all-time highs yesterday after the Federal Reserve (Fed) cut rates, with the S&P 500, Nasdaq and Dow Jones rallying, and small caps jumping 2.5%. Europe also rebounded, despite the European Central Bank (ECB) and the Bank of England (BoE) holding rates steady. But while the champagne flowed in the US, Japanese equities woke up with a hangover: the Bank of Japan (BoJ) kept rates unchanged but announced it will start selling ¥330bn in ETFs per year, dampening sentiment and sending the Nikkei down more than 2%. The ripple effects could hit global risk appetite, push long-term yields higher and revive reverse carry fears.
Elsewhere, the Nvidia-Intel $5bn chip deal and Huawei’s AI chip roadmap highlight a politically charged, heating chip war shaping tech markets.
Risk appetite remains intact but fragile, with geopolitical tensions, high valuations and long-maturity yields keeping investors on edge.
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