JN BOJ Policy Rate

The Bank of Japan is set to keep interest rates steady on Friday but leave scope for further hikes with hawkish communication, as the economy faces mounting inflationary pressure from the Middle East war, a weak yen and robust global AI demand. The central bank, however, will likely stay ambiguous on the pace and timing of future rate hikes as it awaits data on the degree to which surging producer prices from the energy shock spread to the broader economy. Analysts say Governor Kazuo Ueda faces the competing demands of talking down ...

The escalation of the Middle East war sent oil prices sharply higher and pulled interest rates up, too. September WTI rose by more than 10% for a three-week increase of more than 25%. Neither side seems prepared to back down. However, judging by the largest spread this year (~$11) between the September WTI and the December contract suggests many participants suspect the current high level of stress will not be sustained. Yet, reports of the movement of munitions and people are consistent with a dramatic escalation. Moreover, last ...

The Bank of Japan raised its benchmark interest rate to 1% on Tuesday, citing challenges stemming from a weak Japanese yen and higher prices. The central bank’s increase in the uncollateralized overnight rate, by a quarter of a percentage point from 0.75%, puts it at a three-decade high. The central bank has been trying to normalize monetary policy lately after decades of keeping interest rates near or below zero. It adopted ultralow rates to try to encourage more borrowing and spending to counter deflation and pull the economy out ...

Japan’s central bank on Tuesday raised its policy rate to the highest in over 30 years at 1%, in line with expectations of economists polled by Reuters, accelerating policy normalization started in 2024. This is the Bank of Japan’s first hike since December, when it raised rates to its current level of 0.75%, and the first time since 1995 that rates have been raised to 1%. The BOJ said the decision was split 7-1, with board member Toichiro Asada dissenting and advocating for a hold at 0.75%. The policy tightening comes at a time when ...

The Australian dollar led major FX gains on Monday as hopes of a US-Iran peace deal boosted risk appetite. With the RBA and BOJ both set to announce policy decisions, traders now face a critical test for AUD/USD, AUD/JPY and EUR/AUD. The Australian dollar was the strongest FX major on Monday thanks to the risk-on tone driven by hopes of a peace deal between the US and Iran. Those hopes have yet to be derailed by fresh escalation in the conflict, unlike previous reported agreements. That has helped Wall Street indices hold on to their ...

The Bank of Japan is set to raise interest rates to a 31-year high on Tuesday, marking another landmark step in normalising monetary policy as it focuses on taming price pressures from the energy shock caused by the Iran war. The decision would mark a more aggressive approach by the BOJ in dismantling the remnants of the radical stimulus of Governor Kazuo Ueda's predecessor and another step in becoming a more conventional central bank that prioritises fighting inflation. All eyes will be on how the peace deal between the U.S. and ...