The BoJ diverged from other central banks who are unwinding their stimulus programs by saying it was committed to keeping interest rates “extremely low” for the foreseeable future, and pledging to continue buying bonds. The BoJ did signal some flexibility around its yield curve control policy by widening the band that the 10 year JGB would be allowed to fluctuate within. The market promptly tested the limits by selling off prompting swift intervention by the BoJ. In the US the Federal Reserve kept its benchmark interest rate on hold at its policy meeting. With the US economy growing at of 4.1% in the second quarter, the Fed is widely expected to increase rates in September. The Bank of England raised its main rate for the first time since 2007 to 0.75%.

The ECB next meets September 13 where it will have to consider slowing growth (0.3% last quarter) and the impact of slowing trade and growing risk of trade war in its policy decisions.

In a poor couple of weeks for tech shares, Apple managed to top 1 trillion USD in market cap with a strong result, Amazon had similarly strong results but Facebook, Netflix and Twitter saw sharp falls in their stock prices in an apparent divergence at the top of tech.

In a further sign that US President Trump’s trade war may be politically motivated, the President ratcheted up rhetoric ahead of the Ohio special election in the 12th Congressional District where an average of recent polls puts Republican Troy Balderson just ahead of Democrat Danny O’Connor in their bid to succeed Republican Pat Tiberi. Democrats have been winning more congressional seats since Trump took office and the midterms will be a further test for the President. Investors should be cautious either way. So far President Trump for all his faults has been a boost for the US economy and a positive factor for the markets. A Democrat controlled Senate could unwind the tax cuts and stall further deregulation and fiscal expansion in the short and medium term.