Daily Morning Report 18.12.2015

The yen weakened on Friday in volatile trade as Japan’s central bank made some changes to its monetary policy that pointed to easier conditions.

The Bank of Japan voted 8 to 1 as expected to keep its monetary base easing at ¥80 trillion annually, but extended the maturity to 7 to 12 years for purchases of Japan government bonds and setup a new program for exchange traded fund buying in a narrower 6 to 3 vote.

The views on the economy remained stable as continuing to recover, while inflation was seen flat year-on-year.

Earlier, China reported house prices year-on-year for November rose 0.9%, along with an ANZ business confidence survey for December in New Zealand showed a gain to plus-23, an eight-month high, from plus-14.6 in November. NZD/USD traded at 0.6697, down 0.02%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.18% to 99.03.

Overnight, the dollar remained broadly higher against the other major currencies on Thursday, after the release of upbeat U.S. jobless claims data as the Federal Reserve’s decision to raise interest rates for the first time in nearly a decade continued to support.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending December 11 decreased by 11,000 to 271,000 from the previous week’s total of 282,000.

Analysts expected jobless claims to fall by 7,000 to 275,000 last week.

Separately, the Federal Reserve Bank of Philadelphia said that its manufacturing index deteriorated to -5.9 this month from November’s reading of 1.9. Analysts had expected the index to dip to 1.5 in December.

The reports came a day after the Fed raised interest rates by a quarter of a percentage point to between 0.25% and 0.50% at the conclusion of its two-day policy meeting. It was the first rate hike in the U.S. since 2006.

Commenting on the decision, Fed Chair Janet Yellen said that further rate hikes would be gradual and data dependent.