Week Preview: Unchanged Fed, Bank of Canada, and Norges Bank, as Yen Officials Continue Their Tug-of-War

Global Market Developments and Policy Responses

President Trump has retreated from his earlier stance of potentially using force to obtain Greenland and has also decided not to implement the planned tariffs on several European nations that were scheduled for February 1. In response, Europe has withdrawn its threat to abandon the latest trade pact with the United States. Despite a turbulent beginning to the week, stability returned as the sell-off in Japanese government bonds eased. However, these events offered little support to the US dollar. Japanese authorities intensified their verbal interventions following the Bank of Japan's decision to maintain its current policy, which helped steady the yen. Nevertheless, market participants appeared unfazed and continued their trading strategies.