Wall St rallies 1%, yen gains vs dollar; talk of BOJ policy tweak

NEW YORK, Oct 31 – Global stock indexes advanced on Monday, with US stocks rallying more than 1% after recent sharp declines, while the yen rose to a two-week high against the dollar after a report that the Bank of Japan is considering tweaking its yield curve control policy.

Oil prices settled more than 3% lower, partly as fears eased about the Israel-Hamas war disrupting supply from the region.

The Nikkei report, that the BOJ is considering adjusting its yield curve control policy to allow the 10-year Japanese government bond yield to rise above 1%, pushed the yen to 148.81 per dollar, its strongest level since Oct. 17.

The greenback was last down 0.4% at 149.05 yen.

The BOJ kicked off its two-day monetary policy meeting Monday. The recent surge in global interest rates has heightened pressure on the BOJ to change its bond yield control policy.

The US Federal Reserve and Bank of England are also meeting this week. The US monthly jobs report is due on Friday.

“If the BOJ does not do anything tomorrow, which I think that’s what economists expect, and just wait until December, I think the dollar jumps right back versus the yen,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

The dollar index fell 0.469%, with the euro up 0.51% at USD 1.0618.

Stock investors also are closely monitoring quarterly earnings this week, with several big US companies including Caterpillar and Apple due to report this week.

The Dow Jones Industrial Average rose 511.37 points, or 1.58%, to 32,928.96, the S&P 500 gained 49.45 points, or 1.20%, to 4,166.82 and the Nasdaq Composite added 146.47 points, or 1.16%, to 12,789.48.

Wall Street stocks posted losses for last week as economic data seemed to support the “higher for longer” interest rate scenario.

The pan-European STOXX 600 index rose 0.36% and MSCI’s gauge of stocks across the globe gained 0.86%.

In US Treasuries, yields pared gains after the Treasury Department said it expects to borrow USD 76 billion less this quarter than anticipated in the third quarter on expectations of higher revenue receipts.

The Treasury said it expects to borrow USD 776 billion in the fourth quarter, down from $852 billion the prior quarters, assuming an end of December cash balance of USD 750 billion, the department said in a statement.

Yields on 10-year Treasury notes were last up 4.1 basis points at 4.886%, after reaching 4.922% earlier in the day. Last week the benchmark note hit a 16-year high of 5.021%.

In energy, US crude CLc1 fell USD 3.23 to settle at USD 82.31 a barrel, while Brent LCOc1 dropped USD 3.03 to USD 87.45.

Spot gold dropped 0.4% to USD 1,997.86 an ounce.

(Reporting by Caroline Valetkevitch; additional reporting by Gertrude Chavez-Dreyfuss in New York and by Elizabeth Howcroft in London; Editing by Marguerita Choy and Richard Chang)