09-20-2023, 10:46 AM
NEXT TO THE STAGE. BANK OF JAPAN MEETING
![[Image: 8d9ed6011f3712eb7136922f4f884695.png]](https://freshforex.com/netcat_files/Image/8d9ed6011f3712eb7136922f4f884695.png)
Dear clients,
In Asian trading on Monday, the US dollar barely moved, even sterling rose, but the yen fell as a Japanese holiday and a slew of upcoming central bank meetings sucked the air out of the markets.
The Bank of Japan meeting on Friday will be the highlight of the week in Asia, after Bank Governor Kazuo Ueda sparked speculation of an imminent departure from ultra-soft policy.
This has highlighted the Japanese central bank in a week packed with central bank meetings, with a hawkish pause expected from the US Federal Reserve on Wednesday and the Bank of England possibly raising rates for the last time on Thursday.
The yen was unchanged against the US dollar at between 147.63 and 147.88 per dollar, while markets in Japan were closed due to a public holiday. The yen fell 1.3% in the days following Ueda's announcement that he would soon move away from negative rates, with losses for 2023 exceeding 11%.
Economists at Commonwealth Bank of Australia expect yen exchange rate volatility ahead of the policy meeting and believe investors may have misinterpreted Ueda's comments. Recent weakness in Japanese wages and possible prices could also soften and push the BoJ away from its inflation target, so the case for the BoJ to tighten policy is not yet strong.
CRYPTO BLUES: STABLECOIN'S HEAVY SHARE OF LOSSES
![[Image: 52347a715ab48d2638e505a46fe18cd9.png]](https://freshforex.com/netcat_files/Image/52347a715ab48d2638e505a46fe18cd9.png)
Dear clients,
Bitcoin is not the only asset experiencing a late summer downturn.
Stablecoins, cryptocurrencies typically pegged to real assets such as the US dollar, have fallen to their lowest market capitalisation in two years as low trading volumes and a buzzing dollar put pressure on the market for these tokens.
In fact, they are suffering the most.
While the entire cryptocurrency ecosystem has bounced back from 2022 lows, the market capitalisation of the stablecoin sector is set to decline for the 18th consecutive month, according to research firm CCData. It's down by almost a tenth this year and stood at $124.4bn as of 14 September.
Not everyone is keeping pace, though: The largest dollar-stablecoin, Tether, is bucking the downward trend. It hit a record high of $83.8bn in July, according to CoinGecko, after being worth less than $80bn in the first three months of this year, its volume has since fallen to around $82.9bn.
While stablecoins make up only a modest portion of the cryptocurrency market, they play a key role for traders, allowing them to hedge against price spikes in other tokens, such as bitcoin, or to store idle cash without having to transfer it back into fiat currency. Some enthusiasts also envisage using stablecoins as a means of payment.
However, the market for these tokens has been in the doldrums since last year's collapse of the algorithmic token TerraUSD, which was once the fourth-largest stablecoin token and was the first domino in a series of dramatic industry failures.
The market has also suffered losses for Binance's dollar-linked token BUSD, which is down about 89% from its all-time high reached in November. In February, the New York Department of Financial Services ordered issuer Paxos to cease issuing the token, which was once the third-largest stablecoin.
The market value of USD Coin (USDC), the second-largest stablecoin, has fallen more than 53% from its record high reached last June and now stands at more than $26bn.
Dear clients,
In Asian trading on Monday, the US dollar barely moved, even sterling rose, but the yen fell as a Japanese holiday and a slew of upcoming central bank meetings sucked the air out of the markets.
The Bank of Japan meeting on Friday will be the highlight of the week in Asia, after Bank Governor Kazuo Ueda sparked speculation of an imminent departure from ultra-soft policy.
This has highlighted the Japanese central bank in a week packed with central bank meetings, with a hawkish pause expected from the US Federal Reserve on Wednesday and the Bank of England possibly raising rates for the last time on Thursday.
The yen was unchanged against the US dollar at between 147.63 and 147.88 per dollar, while markets in Japan were closed due to a public holiday. The yen fell 1.3% in the days following Ueda's announcement that he would soon move away from negative rates, with losses for 2023 exceeding 11%.
Economists at Commonwealth Bank of Australia expect yen exchange rate volatility ahead of the policy meeting and believe investors may have misinterpreted Ueda's comments. Recent weakness in Japanese wages and possible prices could also soften and push the BoJ away from its inflation target, so the case for the BoJ to tighten policy is not yet strong.
CRYPTO BLUES: STABLECOIN'S HEAVY SHARE OF LOSSES
Dear clients,
Bitcoin is not the only asset experiencing a late summer downturn.
Stablecoins, cryptocurrencies typically pegged to real assets such as the US dollar, have fallen to their lowest market capitalisation in two years as low trading volumes and a buzzing dollar put pressure on the market for these tokens.
In fact, they are suffering the most.
While the entire cryptocurrency ecosystem has bounced back from 2022 lows, the market capitalisation of the stablecoin sector is set to decline for the 18th consecutive month, according to research firm CCData. It's down by almost a tenth this year and stood at $124.4bn as of 14 September.
Not everyone is keeping pace, though: The largest dollar-stablecoin, Tether, is bucking the downward trend. It hit a record high of $83.8bn in July, according to CoinGecko, after being worth less than $80bn in the first three months of this year, its volume has since fallen to around $82.9bn.
While stablecoins make up only a modest portion of the cryptocurrency market, they play a key role for traders, allowing them to hedge against price spikes in other tokens, such as bitcoin, or to store idle cash without having to transfer it back into fiat currency. Some enthusiasts also envisage using stablecoins as a means of payment.
However, the market for these tokens has been in the doldrums since last year's collapse of the algorithmic token TerraUSD, which was once the fourth-largest stablecoin token and was the first domino in a series of dramatic industry failures.
The market has also suffered losses for Binance's dollar-linked token BUSD, which is down about 89% from its all-time high reached in November. In February, the New York Department of Financial Services ordered issuer Paxos to cease issuing the token, which was once the third-largest stablecoin.
The market value of USD Coin (USDC), the second-largest stablecoin, has fallen more than 53% from its record high reached last June and now stands at more than $26bn.