The Bank of Japan left its key short-term interest rate unchanged at -0.1% and maintained the target for the 10-year Japanese government bond yield at around 0% during its January meeting by a 7-1 vote. In a quarterly outlook report, the central bank revised higher its GDP growth projection for the next fiscal year beginning in April to a 3.9% growth from an estimate of 3.6% made in October, reflecting the effects of the government's measures with the impact of COVID-19 gradually waning. Meantime, the BoJ's economic forecast for the current fiscal year was little changed (-5.5% vs -5.6% made in October). Meantime, the projected rates of rise in the CPI were more or less unchanged. The central bank reaffirmed it would not hesitate to take additional easing measures if necessary. In 2020, the BOJ eased monetary policy twice, mostly by expanding asset-buying and creating a new facility to deliver funds vis financial institutions to companies hit by coronavirus.

The Shanghai Composite Index gained 11 points or 0.3% to 3,594 in early trading on Thursday after a rally in Wall Street overnight, with all three major indexes hitting record highs, amid strong enthusiasm over Joe Biden’s inauguration. News that China wants to cooperate with the new US administration also lifted sentiment. At the same time, Beijing reportedly announced sanctions against outgoing Secretary of State Mike Pompeo and 27 other top officials under Donald Trump. Further adding the bullish tone, the WHO plans to approve several COVID-19 vaccines from Western and Chinese manufacturers in the coming weeks and months. Meantime, there were 144 new infections on Wednesday in the mainland, the highest number of daily new cases since March 1st. Authorities are asking people to stay at home during the Lunar New Year holidays in February as part of efforts to contain another outbreak. Basic materials stocks, healthcare, consumer non-cyclicals, and energy led the gains.

Exports from Japan rose by 2 percent year-on-year to JPY 6.71 trillion in December 2020, below market consensus of 2.4 percent increase but ending 24 straight months of declines, the longest stretch on record based on comparable data going back to 1979. Several categories reported double-digit growth: foodstuff (14.0 percent), raw materials (24.1 percent), and chemicals (10 percent). In contrast, exports of manufactured goods fell 1.6 percent; of transport equipment 2.7 percent, and of mineral fuels 51.5 percent. Among top partners, sales to China jumped 10.2 percent, to Korea 20.8 percent, and to Hong Kong 6.4 percent, whereas exports to the United States declined 0.7 percent.

Australia's seasonally adjusted unemployment rate fell to 6.6% in December 2020 from 6.8% a month earlier and below market consensus of 6.7%. This was the lowest jobless rate since April, as the economy emerged gradually from the COVID-19 shocks. The number of unemployed declined by 30,100 to 912,000 people, as people looking for full-time work was down by 14,300 to 658,700 and those looking for only part-time work declined by 15,800 to 253,300. Employment grew by 50,000 to 12,910,800, matching market estimates, as full-time employment went up by 35,700 to 8,761,400, and part-time employment gained 14,300 to 4,149,300. The participation rate edged up to a 16-month high of 66.2% in December from 66.1% in November, in line with forecasts. The underemployment rate fell to 0.8 points to 8.5%, and the underutilization rate dropped 1.1 points to 15.1%. Monthly hours worked in all jobs rose 2 million hours, or 0.1% to 1,753 million hours.

Oil prices dropped on Thursday, with WTI crude falling below the $53 level after API data showed a surprise build in US crude oil inventories. Pressuring prices further were persistent demand concerns due to the ongoing coronavirus crisis, particularly in Shijiazhuang, the largest city of North China's Hebei Province, where an outbreak of COVID-19 this month has left tens of millions of people under strict lockdown. The market took a breather after a recent rally fuelled by prospects of more US economic stimulus.

The Central Bank of Brazil unanimously decided to keep its benchmark interest rate at an all-time low of 2.00 percent on 20 January 2021, as widely expected. The Committee said that recent indicators suggest an improved but uneven recovery in domestic economic activity as uncertainty about growth remains larger than usual. Policymakers noted that inflation readings were higher than expected, as the headline for December jumped to 4.5% from 4.3% in the previous month, rising for the seventh. Still, the bank warned that uncertainty remains unusually high and that it will change to a balance-of-risks approach rather than forward guidance. The Committee warned that the removal of the forward guidance does not mechanically imply interest rates increases, since, at this moment, uncertainties regarding the evolution of growth still prescribe an extraordinarily strong monetary stimulus.

Canada’s main stock index extended gains for the third straight session on Wednesday to end above 18,000 level, as gains among the heavyweight materials sector lifted the broader market. The Bank of Canada’s meeting was in the spotlight today. The Central Bank left monetary policy unchanged and signalled interest rates will remain at record-low levels until at least 2023, saying the economic outlook remains highly conditional on the path of the virus and the timeline for the effective rollout of vaccines. MEG Energy Corp and First Majestic Silver Corp were the biggest gainers on the TSX, up 10% and 9%, respectively.

All three major US indexes finished in record territory on Wednesday, as Joe Biden was sworn in as President. During his speech, Joe Biden said the US must end 'uncivil war' between factions. The 46th US President will also sign 15 executive orders in the afternoon related to the pandemic, the economy, climate change and racial inequity. On the corporate side, the tech sector led the rally with shares of Netflix jumping 17 percent to reach an all-time high. On the policy side, the Chinese government slapped sanctions on 28 members of the Trump administration on Wednesday after Biden’s inauguration speech, claiming violations to China’s sovereignty, banning them and their family members from entering the mainland. The Dow Jones added 285 points or 0.9% to 31,215. The S&P 500 jumped 53 points or 1.5% to 3852. The Nasdaq surged 260 points or 2% to 13,467.

Gold steadied near two-week highs on Thursday, as prospects for additional US fiscal measures boosted the metal's appeal as an inflation hedge. Biden and his Democrat-controlled Congress are due to roll out massive spending plans that include $1,400 checks for most Americans, a temporary boost in unemployment benefits and a rise in the federal minimum wage to $15 per hour. At the same time, lower real yields made gold a more attractive investment this week.