Wall Street nervous over upcoming week full of risks, BOJ Gov Ueda sinks yen

  • Stocks lower as markets price in 71.4% chance of a quarter-point hike at May 3rd FOMC meeting
  • Commercial bank lending drops by $105 billion in two weeks ended March 29th
  • Yen tumbles as BOJ Gov Ueda’s inaugural address sticks current ultra-dovish policies

US stocks are weakening as investors are anticipating the next inflation report will seal the deal for another quarter-point rate hike by the Fed.  This is the week that could tell us that the US consumer is no longer showing resilience and in fact is rather weak; core inflation is making things more expensive, retail sales might show the consumer is tapped out, and the banks might paint a picture that American savings accounts are down and credit card debt is skyrocketing. 

The key takeaway from the NFP report is the labor market is slowly softening but not quickly enough for the Fed to keep rates on hold.  The outlook for the economy is going to get very ugly in Q3 and Q4 as small business is about to get crushed as lending dries up. Commercial bank lending is already starting to show signs it’s falling apart, in the two weeks ended March 29th, lending dropped by $105 billion, the most since the series started in 1973. 

The bond market appears confident that the Fed will be cutting rates by the fall, which is probably why stocks aren’t selling off as much as they should. 


With Europe mostly on holiday, many traders were eagerly awaiting BOJ governor Ueda’s inaugural press conference that followed his meeting with Prime Minister Kishida.  BOJ Governor Ueda noted that signaling any significant changes to its monetary policy framework may be unlikely for the time being. Ueda said there is no need to review the 2013 joint statement for now.

He added, “given the current economic, price and financial conditions, I think it’s appropriate to keep up the current yield curve control.”    

The Japanese yen tumbled as investors are growing even less confident of any abrupt shifts away from the bank’s ultra-loose monetary policy stance.  Swap markets are showing high confidence that the BOJ will not only keep rates on hold at the April 28th meeting, but also the June 16th meeting. 

Ueda Yen

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.