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Bank of Japan Deputy Governor Ryozo Himino: It is difficult to predict the impact of the US-Iran conflict, and it is not appropriate to comment at this stage on how this event will affect the Bank of Japans interest rate decision based on specific scenarios.The documents show that Toyota Motor plans to raise its takeover offer for Toyota Industries if it can obtain loan guarantees from banks.Hondas sales in Japan fell 8.2% year-on-year in February.March 2 – According to ABC News, a law enforcement bulletin indicates that the U.S. Department of Homeland Security has warned of potential attacks and cyberattacks orchestrated by isolated individuals amid ongoing Iranian retaliation. The bulletin states, “While large-scale physical attacks are unlikely, Iran and its proxies could pose a continued, targeted threat of attack against the homeland. In the near term, our greatest concern is low-level cyberattacks against U.S. networks by pro-Iranian hackers, such as website defacement and distributed denial-of-service attacks.” The alert was issued on Saturday, following a shooting in Austin, Texas, where authorities are investigating whether the suspect was influenced by the situation abroad. Law enforcement sources indicate that the suspect in the shooting was wearing a sweatshirt with the words “Property of Allah” printed on it, over which was a shirt with the word “Iran” and the Iranian flag.On March 2nd, Bank of Japan Deputy Governor Ryozo Himino gave no clear indication of a near-term interest rate hike, reinforcing financial markets expectations that the central bank will remain on hold in March. Following the outbreak of conflict in the Middle East last weekend, the market widely believed the Bank of Japan would maintain a wait-and-see approach. Himino stated, "I want to closely monitor the situation in the Middle East," a stark contrast to his comments in January, when he indicated the committee would discuss interest rate hikes at its upcoming meeting. Himino, who will hold a press conference this afternoon, said his prepared remarks were made before the weekend and therefore did not include his views on the Middle East situation. Himino stated that recent data "means the impact of a near-term rate hike remains limited, and financial conditions remain loose," suggesting there is still room for borrowing costs to rise. He also stated that underlying inflation is steadily rising and cited the Bank of Japans long-standing stance that it will continue to raise interest rates if its economic outlook is realized.

Gold Price Prediction: XAU / USD corrects to around $1,910 despite intensifying concerns of a global banking crisis

Alina Haynes

Mar 16, 2023 14:00

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After reaching a new six-week high at $1,937.39, the gold price (XAU/USD) displayed a corrective move during the Asian session. As gold's allure is extremely strong amid growing concerns about the global banking crisis, a correction in the precious metal appears to be short-lived. Credit Suisse's debacle following the failure of Silicon Valley Bank (SVB) has triggered the risk of global financial instability, and uncertainty over the Federal Reserve's (Fed) upcoming interest rate decision has bolstered the case for the Gold price.

 

S&P500 futures have shown a recovery move following Wednesday's sell-off as investors assess the banking sector's uncertainty. However, the motif of risk aversion has not yet completely subsided.

 

During the Asian session, the US Dollar Index (DXY) is fluctuating in a narrow range of around 104.60. It appears that the impact of banking sector turmoil is maturing for the USD Index, and investors are beginning to discount expectations for next week's monetary policy. According to the CME FedWatch instrument, the probability that Fed chair Jerome Powell will raise interest rates by 25 basis points (bps) has risen above 70%. While 30% of the probabilities support maintaining the current interest rate policy.

 

Increasing odds of a status quo monetary policy are supported by a declining Consumer Price Index (CPI), a rising Unemployment Rate, sluggish Retail Sales, and a declining Producer Price Index (PPI).


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