BOJ, Fed Both Hike; USD/JPY Whipsaws Before Xi-Trump Summit
As of 2026-09-19 07:00 SGT
Key points
- The BOJ raised its policy rate to 1.25% on Sept 18 (7-2 vote), the fastest hiking pace in roughly 31 years; Governor Ueda said the "phase of policy has changed"
- USD/JPY whipsawed: it weakened past 157 right after the BOJ decision on a "not hawkish enough" read, then reversed sharply on reports of a rate check by the Ministry of Finance and the BOJ, settling near 156.85 by the weekend
- The Fed also hiked on Sept 16 for the first time in three years, with the dot plot signaling one more move this year; the 10-year Treasury yield climbed to 4.998% and the Dow posted its worst week since March
- Warren Buffett stepped down as Berkshire Hathaway chairman, becoming honorary chairman after six decades at the helm
- Gold gained 0.68% on the week and Bitcoin reclaimed $80,000 (+6.31%), while crude eased as Saudi pipeline repairs cooled Middle East supply concerns; next week's focus is the Sept 24 Xi-Trump summit
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 156.85 | +0.58% |
| EUR/USD | 1.1489 | +0.08% |
| Nikkei 225 (close) | 65,019 | +1.38% |
| Hang Seng (close) | 24,751 | +0.15% |
| Dow futures | 52,138 | -0.16% |
| S&P 500 futures | 7,725.00 | +0.23% |
| Nasdaq 100 futures | 29,955 | +0.71% |
| Gold futures | 4,415.90 | +0.37% |
| WTI crude | 95.47 | -1.81% |
| Bitcoin | 81,169 | +6.31% |
| US 10-yr yield | 4.998% | +5.1bp |
Foreign exchange — USD/JPY whipsaws on the BOJ/Fed double hike
The Bank of Japan raised its policy rate to 1.25% on Sept 18 in a 7-2 vote, the fastest hiking pace in roughly 31 years. Governor Ueda said the "phase of policy has changed," striking a hawkish tone, but the market's initial read was "not hawkish enough" and USD/JPY pushed past 157 immediately after the decision. The pair reversed sharply once reports emerged of a rate check by the Ministry of Finance and the BOJ, settling near 156.85 by the weekend, inside the week's range of a 158.00 high and a 156.12 low. EUR/USD was little changed at 1.1489, up just 0.08% on the week. The rate-check episode should keep USD/JPY capped heading into next week's Tokyo open.
Equities — Nikkei digests the hike, Wall Street stumbles on yields
The Nikkei 225 closed the week at 65,019 (+1.38%), extending gains as it digested the BOJ hike without disruption, while the Hang Seng closed at 24,751 (+0.15%). In the US, the Sept 16 FOMC hike and hawkish dot plot pushed yields higher; the Dow closed Sept 18 at 51,682.64 (down 95.40 points, -0.18%), posting its worst week since March. The Nasdaq bucked the trend, extending gains on continued AI-stock buying. Buffett's departure as Berkshire chairman closed out six decades atop the conglomerate. Heading into next week's Xi-Trump summit, AI and semiconductor names remain the swing factor for the broader tape.
Macro — a hawkish double hike meets mixed hard data
The Fed hiked on Sept 16 for the first time in three years, with the dot plot signaling room for one more move this year. The 10-year Treasury yield closed Sept 18 at 4.998% (+2.9bp on the week, ranging 4.918%-5.039%), nearing the 5% threshold; the 2-year yield rose to 4.743% (+11.8bp on the week), closing in on its April 2024 peak of 5.0434%. Yet August industrial production released the same day was flat month-on-month, missing the +0.3% forecast — a reminder that hawkish policy is running alongside softer hard data. In the UK, CPI rose to 3.1% and the Bank of England held its rate at 3.75%. Into next week, risk appetite ahead of the Xi-Trump summit will jostle with ongoing Fed/BOJ tightening bets for control of the rates market.
Commodities — gold firm, oil eases as supply fears recede
Gold futures ended the week at $4,415.90 (+0.37% on the day), with spot gold up 0.68% on the week at $4,377.73; spot gold briefly slumped to $4,235.59 as Fed Chair Warsh's press conference wrapped up on Sept 16 before recovering. WTI crude closed at $95.47 (-1.81% on the day), softer on the week as reports of Saudi pipeline repairs eased Middle East supply concerns. Bitcoin ended the week at $81,169 (+6.31%), reclaiming the $80,000 mark. Crude should stay capped into next week as the Saudi supply picture keeps easing.
Geopolitics — Greenland deal and the Xi-Trump summit headline next week
President Trump said on Sept 18 that the US had reached a security agreement with Denmark and Greenland; Denmark's prime minister's office confirmed a deal is expected to be signed next week during the UN General Assembly, giving the US a long-term security role in Greenland. Trump also signed sanctions legislation targeting Russia and Iran the same day. In the Middle East, reports of Saudi pipeline repairs eased — though didn't eliminate — supply-side tension. The week's biggest catalyst is the Sept 24 Xi-Trump summit, with China tariffs and Taiwan arms sales both on the table.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 09/24 | US/CN | US-China summit (Xi's Washington visit) | High |