The dollar is largely range-bound in its consolidative phase, mirroring recent trends. The Bank of Japan opted for stability but hinted at an imminent policy adjustment, with the market leaning towards an April timeline.

Japanese stocks experienced profit-taking, yet other major regional markets, buoyed by China and yesterday's US rally that set new records for the S&P 500 and Nasdaq 100, showed gains. Europe's Stoxx 60 dipped about 0.2% after yesterday's 0.75% surge. US index futures display a slight downward bias.

Gold maintains a $2015-$2040 range. March WTI exhibited an outside up day, but the lack of follow-through buying keeps the crude oil contract within a $70-$75 range.

Asia Pacific
The Bank of Japan adjusted its economic forecasts, trimming growth for the current fiscal year to 1.8% from 2.0%. Next fiscal year's GDP forecast was raised to 1.2% from 1.0%, while FY25's forecast remained at 1.0%.
Japan is set to report its December merchandise trade balance tomorrow, confirming the third consecutive annual deficit, with the 2023 deficit expected to be around half of 2022's. Tomorrow also brings the flash January PMI for Japan (and Australia).

The dollar, little changed for the third consecutive session, experienced volatility after the BOJ announcement, dropping to a five-day low near JPY147 before recovering to JPY148. The Australian dollar traded within a limited range.

Europe
Tomorrow will see the release of preliminary January PMI for the eurozone and the UK, followed by ECB and Norges Bank meetings on Thursday. Both economies remain practically stagnant, with the eurozone composite PMI below 50 since June.

The euro, trading in a narrow range above $1.0880, briefly touched a near five-day high near $1.0915 today but failed to sustain momentum, retreating to around $1.0880.
Sterling performed relatively better, firming to a new six-day high near $1.2750.

America
The impact of the Philadelphia Fed's non-manufacturing survey and the Richmond Fed's surveys is likely limited ahead of Wednesday's flash PMI, Thursday's Q4 GDP, and Friday's personal income and deflator data.

The US dollar recovered half of its losses since last Wednesday's high near CAD1.3540, initially extending losses to a new four-day low near CAD1.3415 before reversing higher, despite the rise in US equities and oil prices.