During the week ahead the market is likely to look towards a number of key market themes and events which have the potential to indicate financial market moves.
The economic calendar is heavily focused around the Bank of Japan rate decision and earnings season. Also, the US economy releases important GDP data.
Bank of Japan Rate Decision
This week we see the first Bank of Japan’s first meeting with new governor Kazuo Ueda as head of the central bank. The big question is whether Ueda will lay the groundwork for a possible change of the banks policy.
Ueda has been careful not to deviate too much from previous Governor Kuroda. At his first press conference after officially taking charge on 9 April, Ueda stuck to the script as he said the existing policy remained appropriate under current economic conditions.
With core consumer price growth in Japan running at a 40-year high of 3.8%, it is possible that at some point the BOJ may need to change course.
Inflationary pressures seem persistent, especially fuelled by stronger-than expected wage growth, which could pave the way for the BoJ to at least tweak the Yield Curve Control in either the June or the July meeting.
Overall, I do not expect any changes to monetary policy on the new Governor Ueda’s first monetary policy meeting on 28 April.
Next week is probably the biggest one for the earnings for the quarter. There are a number of big cap companies on the calendar, with the potential to surprise and send stock prices higher or lower.
Microsoft, Alphabet, Amazon, Meta, Coca Cola are just some of the big names that the market will be watching closely next week.
As a bellwether for tech, Microsoft’s quarter results will be very important. Since Microsoft published its Q2 results on 24 January, its shares have risen 18.7% to levels just below last August’s high.