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A Reuters poll on August 21st showed that nearly two-thirds of economists predict the Bank of Japan will raise its key interest rate by at least 25 basis points again later this year, a further increase from over half two weeks ago. While recent news of a weakening US job market has reignited expectations of a Federal Reserve rate cut next month, 70% of analysts in the survey said this alone would not slow the Bank of Japans pace of moderate monetary tightening. In the August 12-19 survey, 67 of 73 economists (92%) predicted the Bank of Japan would keep interest rates unchanged at its September meeting. However, 45 of 71 respondents (63%) expected the central bank to raise rates by at least 25 basis points to 0.75% in the next quarter, compared to 54% in the previous months survey. Of the 40 economists who gave a specific forecast for the next rate hike, 38% chose October as the most likely date, 30% chose January next year, and 18% predicted December this year.VSTECS (00856.HK): In the first half of the year, the companys profit attributable to equity holders was HK$610 million, compared with HK$453 million in the same period last year, an increase of 34.66% year-on-year.AAC Technologies (02018.HK): The gross profit margin in the first half of the year was 20.7%, a slight decrease of 0.8 percentage points year-on-year, mainly due to changes in product structure: revenue from precision structural parts business, optical business and sensor and semiconductor business increased significantly.Reuters poll: 22 of 29 economists said they "strongly" or "somewhat" support the Japan-US tariff agreement.A Reuters poll found that 70% of economists surveyed said weak U.S. jobs data would not delay the Bank of Japans interest rate hike plans.

GBP/JPY struggles close to 159 as focus turns to Japan's Inflation

Alina Haynes

Jan 19, 2023 15:10

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In early Asian trade, the GBP/JPY pair is behaving erratically close to the critical level of 159.00. Following a fall from Wednesday's high above 161.50, the cross is now rangebound. Despite Governor Haruhiko Kuroda's dovish statements, the asset saw a significant decrease as GBP/JPY gave up the Bank of Japan's (BoJ) policy-driven gains.

 

After maintaining the interest rate at -0.10% and the 10-year Japanese Government Bonds (JGBs) around 0%, BoJ Kuroda claimed that there is "no need to further extend bond target band," causing the GBP/JPY exchange rate to decline. He continued by stating that Japan's economy is continuing on the road to recovery from the epidemic, and that the Bank of Japan intends to achieve its inflation target of 2% in tandem with wage growth.

 

The nearing end of Governor Kuroda's term at the end of April will continue to fuel rumors of a policy shift under new leadership, according to analysts at MUFG who predict that the Yen sell-off will be limited and maintain an optimistic stance for the JPY in the coming year. They remarked, "We expect market participants to maintain their skepticism regarding the long-term viability of YCC policy settings."

 

The release of the National Consumer Price Index (CPI) on Friday will offer further guidance for the Japanese Yen. According to the consensus, the annual headline CPI (Dec) is expected to rise from 3.8% to 4.4%. It is anticipated that the core inflation rate, which includes oil and food prices, would rise to 2.9% from the previously reported 2.8%.

 

The Bank of England (BoE) will be dissatisfied by the United Kingdom's headline inflation decelerating to 10.5% from 10.6%, as the current CPI is much over the median rate. The market expects Andrew Bailey, governor of the Bank of England, to hike interest rates somewhat more than anticipated.


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