Global markets were shaken yesterday after the Bank of Japan announced (pdf) a surprise loosening of its “yield curve control” policy, triggering sell offs in the global bond and equity markets and sending the JPY soaring more than 4% against the greenback, the Financial Times reports.

What happened? The central bank said it will allow yields on long-term bonds to rise to 0.5% from 0.25%, an abrupt switch in its radically-loose monetary policy that has for years suppressed yields in a bid to end the country’s chronic low inflation problem. This position has become increasingly untenable amid a wave of monetary tightening around the world that has sent the JPY plunging to its lowest level in more than 30 years.

BOJ chief Haruhiko Kuroda pushed back against the idea that the central bank had tightened policy but that’s not how markets interpreted the move, with Japanese equity and bond markets seeing heavy sell-offs and the JPY notching its biggest one-day gain in years. The news fed through to the global markets too, with global bond yields rising and shares across much of the world ending in the red.

This could be a good thing for the rest of the world: The move could put further downward pressure on the greenback, which will be welcome news to Egypt and much of the rest of the world which has struggled to deal with a rampaging USD this year.

But then again…: A heavy sell-off in USD assets in favor of the JPY wouldn’t be great news for global financial markets.

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Saudi wealth fund wants a piece of Tabreed’s local unit: The Public Investment Fund (PIF) is reportedly in talks to buy a USD 250 mn stake in the Saudi arm of Dubai-listed district cooling firm Tabreed, Bloomberg reported yesterday. The transaction would hand it a “significant holding” in the company ahead of a potential IPO in the next 24-36 months, the news outlet reported, citing people familiar with the matter. Tabreed has been expanding aggressively in the region and entered the Egyptian market earlier this year.

Western sanctions are already inflicting pain on Russia’s oil sector: Seaborne exports of Russian crude plunged 54% in the first week after the introduction of the G7 price cap, according to Bloomberg.

	EGX30	14,523	-1.5% (YTD: +21.5%)
	USD (CBE)	Buy 24.68	Sell 24.77
	USD at CIB	Buy 24.68	Sell 24.75
	Interest rates CBE	13.25% deposit	14.25% lending
	Tadawul	10,280	+0.9% (YTD: -8.9%)
	ADX	10,343	-0.2% (YTD: +21.9%)
	DFM	3,348	+0.3% (YTD: +4.8%)
	S&P 500	3,822	+0.1% (YTD: -19.8%)
	FTSE 100	7,371	+0.1% (YTD: -0.2%)
	Euro Stoxx 50	3,802	-0.2% (YTD: -11.5%)
	Brent crude	USD 79.74	-0.1%
	Natural gas (Nymex)	USD 5.35	-8.6%
	Gold	USD 1,818.07	+1.7%
	BTC	USD 16,870	+1.7% (YTD: -63.5%)

THE CLOSING BELL-

The EGX30 fell 1.5% at yesterday’s close on turnover of EGP 2.36 bn (54.5% above the 90-day average). Local investors were net buyers. The index is up 21.5% YTD.

In the green: Palm Hills Development (+10.8%), Telecom Egypt (+4.9%) and Juhayna (+3.0%).

In the red: Mopco (-4.2%), EFG Hermes (-4.1%) and Elsewedy Electric (-3.9%).

It’s a mixed picture in Asia this morning: Shares in China and Hong Kong are the green but the Nikkei is continuing to feel the effects of the Bank of Japan’s policy switch yesterday and is down 0.7%. Shares in Europe and the US are expected to rise later today.