JN BOJ Policy Rate

Headline inflation slowed to 1.8% YoY in October (vs 2.1% in September), in line with market consensus. Utility subsidies were the main reason for the slowdown in year-on-year growth as utility prices eased to 2.4% from the previous month's 9.0%. But, we believe that the underlying pricing pressure is still building. Core inflation indicators rose 1.8%, which were higher than market expectations and core, excluding fresh food and energy, even accelerated from the previous month's 1.6%. In a month-on-month comparison, CPI rebounded ...

video The Federal Reserve’s surprise decision in September to cut rates by a larger-than-expected 50-basis-points seems like a distant memory now, as policymakers are once again sending out hawkish soundbites. US economic indicators since the September meeting have been on the strong side, including the CPI report, with Fed officials cautioning that another 50-bps cut is unlikely in the near term. The sudden switch in the narrative from ‘hard landing’ to ‘soft landing’, or possibly even a ‘no landing’, has spurred a sharp reversal ...

The dollar rose against all the G10 currencies last week, but it was not because of higher US rates. In fact, the 10-year US Treasury yield fell for the first time in five weeks. The two-year yield did not rise for the first time in three weeks. Rather than an increase in US rates, several other countries' rates fell. The result was that the US 2-year premium over Germany rose for the fourth consecutive week and is now the most since June. The US premium over Canada rose for the third week and the sixth week in the past seven. It is ...

Bank of Japan officials see little need to rush into raising interest rates this month while they remain on track to hike at a later stage with inflation staying in line with forecasts, according to people familiar with the matter. Officials see only a small risk of prices significantly outpacing the central bank’s quarterly projections set out in July, reducing the need to act quickly, the people said. The BOJ also sees a need to monitor the US economy and the potential economic and market impact of the US election next month among ...

Bank of Japan Board Member Seiji Adachi emphasized the need for taking a gradual approach to raising the benchmark interest rate, in comments that will likely cement views in the market that authorities will stand pat when they gather to set policy this month. “What we need to be careful of, in a gradual rate hike process, is that we raise it extremely gradually while keeping financial conditions accommodative” until the price trend gets to 2%, Adachi said in a speech to local business leaders in Kagawa, on the island of Shikoku, ...