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April 21, people familiar with the matter said that despite the uncertainty caused by US tariffs, Bank of Japan officials do not see the need to change their existing stance of gradual interest rate hikes at this time. People familiar with the matter said that Bank of Japan officials believe that Trumps tariff actions and retaliatory actions against the United States may weaken Japans economy and may delay the progress of the central banks price target. But for now, their overall economic forecasts remain largely unchanged as they wait for more data to analyze the impact of US tariffs. Given the various possible economic scenarios, officials view is that it is too early to incorporate these scenarios into the basic forecast and make major changes to the central banks policy stance, people familiar with the matter said. The Bank of Japan may also consider lowering its inflation expectations in the quarterly economic report released at the end of the policy meeting, people familiar with the matter said. This change would come from a stronger yen, lower oil prices and possible economic weakness. They said the Bank of Japans first core inflation forecast for fiscal 2027 is likely to be around 2%.On April 21, people familiar with the matter said that despite the uncertainty caused by US tariffs, Bank of Japan officials do not see the need to change their existing stance of gradual interest rate hikes at this time. People familiar with the matter said that Bank of Japan officials believe that the Trump administrations tariff actions and retaliatory actions against the United States may weaken Japans economy and may delay the progress of the central banks price target. But the people familiar with the matter added that for now, their overall economic forecasts remain largely unchanged because more data is needed to analyze the impact of US tariffs. Given the various possible scenarios for the economy, officials view is that it is too early to incorporate these scenarios into the basic forecast and make major changes to the central banks policy stance, the above-mentioned people familiar with the matter said.Sources: India wants to impose a 12% temporary tariff or safeguard duty on imported steel "as soon as possible".On April 21, Ankai Bus announced that its operating income in the first quarter of 2025 was 658 million yuan, a year-on-year increase of 14.84%. Its net profit was 4.3703 million yuan, a year-on-year decrease of 9.95%.Market news: The Bank of Japan is reportedly discussing lowering its economic growth forecast for this year.

Commodity Investing: How to Get Started

Larissa Barlow

Mar 25, 2022 17:36

What Is the Definition of a Commodity? 

Commodity is a term that refers to a basic good used in trade that is interchangeable with other similar items. Commodities are frequently utilized as raw materials in the manufacture of other items or services. While the quality of a particular commodity may vary somewhat amongst producers, it is generally uniform. Commodities must also fulfill set minimum requirements, referred to as a base grade, before they may be traded on an exchange.


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Commodities: An Introduction

The basic premise is that there is minimal distinction between a commodity produced by one producer and a commodity produced by another. Regardless of the manufacturer, a barrel of oil is essentially the same commodity. In comparison, when it comes to electronics, the quality and functionality of a particular product might vary significantly depending on the manufacturer.

 

Commodities include wheat, gold, meat, oil, and natural gas. The term has been broadened in recent years to cover financial instruments such as foreign currencies and indices. Technological advancements have also resulted in the introduction of new commodities into the marketplace. For instance, minutes and bandwidth on a cell phone.

Commodity Buyers: There are Several Types

There are two distinct categories of commodity buyers: those that engage in transactions with producers and those who behave as speculators.

Buyers and Manufacturers

Commodities are often sold and purchased via futures contracts on exchanges that regulate the quantity and minimum quality of the commodity being traded. For instance, the Chicago Board of Trade (CBOT) specifies that each wheat contract is for 5,000 bushels and specifies the grades of wheat that may be utilized to fulfill the contract.

 

Commodity futures traders fall into two categories. The first category includes commodity buyers and producers who utilize commodity futures contracts for the hedging reasons for which they were designed. When the futures contract expires, these traders produce or receive delivery of the underlying commodity.

 

For instance, a wheat farmer who plants a crop can protect himself from losing money if the price of wheat declines before the crop is harvested. When the crop is sown, the farmer can sell wheat futures contracts, ensuring a set price for the wheat at harvest.

Speculators in Commodities

The speculator is the second sort of commodities trader. These are traders that participate in the commodities markets solely to benefit from the market's erratic price changes. When the futures contract expires, these traders have no intention of producing or taking delivery of the underlying commodity.

 

Numerous futures markets are extremely liquid and exhibit a high degree of daily range and volatility, which makes them quite attractive for intraday traders. Many index futures are utilized to hedge risk by brokerages and portfolio managers. Additionally, because commodities do not normally trade in lockstep with the equities and bond markets, some commodities may be utilized to diversify an investment portfolio successfully. 

How Are Commodities and Derivatives Related?

The current commodities market is primarily reliant on derivative instruments such as futures and forward contracts. Without the need to exchange real commodities, buyers and sellers may deal simply and in big numbers. Many buyers and sellers of commodity derivatives do so in order to bet on the underlying commodities' price fluctuations for risk hedging and inflation protection objectives.