In its policy meeting tomorrow, the Bank of Japan is widely expected to make its first rate hike since 2007, as evidence mounts that wage-inflation pressures are finally reaching an appropriate level to drive such a hike.

1. The Bank of Japan will shortly begin a policy meeting which will culminate tomorrow with forecasts and a decision on interest rates. The Bank is widely expected to hike rates tomorrow by 90% of those polled, including Goldman Sachs, to put them in positive territory for the first time in many years, with the Bank not having raised its interest rate for over 17 years. Although the hike is expected, it could be seen as likely to trigger new strength in the Japanese Yen.
2. Stock markets in Asia are climbing as the week opens, led higher by a strong rally in the Japanese market on the back of tomorrow’s expected central bank policy change. The Nikkei 225 Index is up by more than 2.66% on the day.
3. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open today. The Japanese Yen has been the weakest.
4. Bitcoin is advancing again after making a new all-time high last Thursday just below $74,000, boosted by strong net inflows to ETFs. The short-term price action looks bullish. Trend traders will be interested here on the long side.
5. In the commodities market, Cocoa futures rose very strongly last week – by over 24% - to reach new multi-year highs. Trend traders will be keen to be involved in this very long-running trend on the long side.
6. In addition to the Bank of Japan’s policy meeting tomorrow, the Reserve Bank of Australia will also be meeting. The RBA is expected to leave its rate unchanged at 4.35%.
7. Chinese Industrial Production data released earlier was higher than expected, showing an annualized increase of 7.0% when only 5.3% was expected.

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