Japan's Finance Minister Suzuki: The market determines the forex rate

Members commenced their discussion of international economic developments by noting that Russia's invasion of Ukraine had contributed to high and volatile commodity prices at a time of strong demand as the global economy recovered from the COVID-19 pandemic. This would further boost global inflation in the period ahead. The related increase in uncertainty and fall in real incomes would weigh on economic activity in some regions, particularly commodity-importing countries in Europe, where growth forecasts for 2022 had been revised downwards to the greatest extent. For commodity-exporting countries, previous episodes where supply shocks had contributed to rising commodity prices suggested that the boost to incomes is likely, for the most part, to be saved; accordingly, the net result would most likely be an overall drag on global growth. More broadly, members agreed that the longer-term geopolitical and economic consequences of the war in Ukraine are likely to be material, but difficult to predict. The effect of the invasion of Ukraine on commodities markets had been most pronounced in energy, reflecting Russia's role as a significant supplier of natural gas, crude oil and coal. Higher energy prices had raised costs for transport, electricity, base metals and other energy-intensive production. In addition, the invasion had disrupted global food supplies as Russia and Ukraine are significant producers of wheat and vegetable oils. Fertiliser prices had also risen sharply, which could reduce crop yields internationally if farmers respond by curtailing the use of fertiliser. Members also noted that iron ore and metallurgical coal prices had increased over recent months. This was mainly because steel production in China had strengthened as authorities eased restrictions on production. The Chinese authorities were also expected to ease fiscal settings over the course of the year in support of the GDP growth target for 2022. Members noted that global supply chains had remained strained overall. Global shipping costs had increased further after stabilising earlier in the year, and semiconductor prices had also picked up again. In China, the imposition of COVID-19 containment measures in some cities in response to recent virus outbreaks had the potential to exacerbate global supply chain disruptions. Supply chain pressures had eased in some other areas, as seen in the rebound in vehicle production and decline in surveyed delivery times. Labour supply disruptions in advanced economies had also eased after outbreaks of the Omicron variant earlier in the year. Members observed that consumer price inflation had continued to rise to multi-year highs in many economies, with Japan and China notable exceptions. Further increases were expected in the period ahead in response to the direct and indirect effects of higher commodity prices. As a result, a number of central banks had revised their inflation forecasts upwards by 1½–2 percentage points since earlier in the year. While core inflation had generally remained below headline rates, it too was at multi-decade highs in many countries. Members agreed that persistent increases in food an tweet at 9:31pm: RBA MINUTES AUSTRALIAN ECONOMY HAD REMAINED RESILIENT AND SPENDING WAS PICKING UP FOLLOWING THE SETBACK CAUSED BY THE OUTBREAK OF THE OMICRON VARIANT tweet at 9:33pm: RBA MEETING MINUTES: INFLATION HAD INCREASED AND A FURTHER RISE WAS EXPECTED, WITH UNDERLYING INFLATION MEASURES IN THE MARCH QUARTER EXPECTED TO BE ABOVE 3%.AUD/USD shoots above 0.7360 as the RBA releases April’s monetary policy minutes AUD/USD has bounced back sharply from 0.7350 on the release of the RBA April’s minutes. • The RBA kept its interest rates unchanged in April and dictated neutral guidance. A minor correction in the US Treasury yields has pressured the DXY. The AUD/USD pair has rebounded firmly after hitting a low of 0.7350 in the Tokyo session as the Reserve Bank of Australia (RBA) has released the minutes of the monetary policy announced in the first week of April. Earlier, the announcements made in April’s monetary policy brought an intense sell-off in the asset as RBA chair Philip Lowe adopted a neutral stance. An unchanged interest rate policy was announced by the RBA along with a wait and watch guidance. The RBA believes that current price pressures are still not compelling for a rate hike sooner. Last week’s release of a hike in the Unemployment Rate by the Australian Bureau of Statistics is not demanding any rate hike sooner. The Unemployment rate landed at 4% against the estimate of 3.9%. Also, the vulnerable Employment Change trimmed the chances of a rate hike by the RBA. The Australian administration added only 17.9k jobs against the consensus of 40k. Meanwhile, the US dolla

tweet at 9:27pm: *JAPAN'S SUZUKI SAYS YEN HAS BEEN WEAKENING RAPIDLY so intervene tweet at 9:29pm: JAPAN'S FINANCE MINISTER SUZUKI: UNDER THE CURRENT CIRCUMSTANCES, THE WEAKENING OF THE YEN BRINGS MORE DISADVANTAGES THAN ADVANTAGES.