• The US Dollar is flat to a touch softer in the aftermath of the BoJ meeting.
• Traders try to keep powder dry towards main events on Thursday and Friday. 
• The US Dollar Index sees pressure building on 103 to break lower. 

The US Dollar (USD) is flat again, though it keeps flirting with a break below the important 103-level in the US Dollar Index (DXY). Markets are having difficulties with the Bank of Japan (BoJ) rate decision this Tuesday. BoJ governor Kazuo Ueda has tested markets’ patience by not hiking, and postponing the long awaited exit out of negative rates. Markets are not reacting very well to the nerve game the BoJ is playing, with US yields jumping higher and equities flat to mildly negative. 

On the economic front, some very light data lies ahead of Thursday and Friday. In the run-up to the US Gross Domestic Product (GDP) and rate decision from the European Central Bank (ECB) along with comments from ECB’s head Christine Lagarde on Thursday, traders are looking for some clues in the Redbook index and Richmond Fed Manufacturing Index for January. Certainly that last one might initiate some moves in the Greenback, seeing the recent poor performance of several Manufacturing Index numbers over the past few weeks. 

Daily digest market movers: BoJ hits nerves

• The Bank of Japan (BoJ) has kept its interest rates unchanged. Governor Kazuo Ueda said that easing will still take place even when negative interest rates end. There was no commitment on the timing of when the actual hike would happen. Markets are not reacting well on being left in the dark on the timing of the first rate hike. 
• Holders of Belarusian EU bonds have sent a notice of default to Minsk, according to RBC.
• Around 13:55 GMT the Redbook Index is due to be released. Previous was at 5%.
• Near 15:00 the Richmond Fed Manufacturing Index for January is due to be released. Previous number was at -11 with -7 expected. Expect some market movements on the back of this number as several Manufacturing Indices have fallen into contraction and might be the first signal of a possible recession or downturn for the US economy. 
• Around 16:30 the US Treasury will allocate a 52-week bill. 
• A 2-year Note will be placed in the markets by the US Treasury near 18:00. 
• Equity markets are not digesting the BoJ rate decision. Equities are looking for direction with most indices in the red by 0.50%. Only outlier is the Chinese Hang Seng, up over 2.6% after the Chinese government is set to issue further supportive measures for the Chinese stock markets. 
• The CME Group’s FedWatch Tool shows that markets are pricing in a 97.4% possibility for an unchanged rate decision, with a slim 2.6% chance of a cut.
• The benchmark 10-year US Treasury Note jumps back up to  4.13% after its decline on Monday to sub 4.10%.