EUR/USD 1.16271

USD/JPY 158.218

GBP/USD 1.34480

GBP/JPY 212.776

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BNP Paribas expects the Bank of England to keep interest rates unchanged in March, whereas it had previously anticipated a rate cut.March 11 – Due to persistent inflationary pressures, two major Australian banks expect the Reserve Bank of Australia (RBA) to raise interest rates for the second consecutive week. National Australia Bank (NAB) and Westpac predicted on Wednesday that the RBA will raise rates by 25 basis points to 4.1% next week, in line with expectations from UBS and Deutsche Bank. NAB Chief Economist Sally Auld stated, “Given Australia’s relatively unfavorable inflation starting point and recent data confirming that the economy is running well above trend growth, the rationale for a rate hike in the near term is clear.” Westpac Chief Economist Luci Ellis said that the RBA’s belief that demand continues to exceed economic capacity and its willingness to address surging overall inflation to prevent a sustained rise in price expectations prompted her to change her forecast. Ellis stated, “There could be disagreements at next week’s meeting. Market participants should consider the possibility that the RBA might choose to wait until May to raise rates, but this is no longer our base case scenario.”March 11 (Kyodo News) – Japanese Economy, Trade and Industry Minister Ryosuke Akazawa stated on Wednesday during a parliamentary committee meeting, in response to questions from lawmakers, that the Japanese government has not ruled out the possibility of releasing national oil reserves "on its own initiative," rather than as part of a coordinated action. He added, "We will take all possible measures to ensure a stable energy supply." As of the end of December, Japans total oil reserves were sufficient to meet domestic consumption needs for 254 days, of which 146 days worth were held by the government, 101 days worth were held by the private sector, and the remainder were stored jointly with oil-producing countries.March 11th - This years government work report further clarified the need to "expand market access with a focus on the service sector," accelerating Beijings new round of opening up. In the first batch of pilot programs nationwide to expand opening up in areas such as value-added telecommunications and healthcare, Beijing became the first city in China to establish a foreign-invested enterprise specializing in human gene diagnosis and treatment technology. To date, more than 60 foreign-invested enterprises have participated in the pilot programs. Last year, Beijing saw over 2,400 new foreign-invested enterprises, a record high. According to the Beijing Municipal Bureau of Commerce, this year will see the release of the 3.0 plan for the comprehensive demonstration zone for expanding opening up in the service sector, the implementation of actions to enhance the opening-up level of key industrial parks, the promotion of differentiated development of comprehensive bonded zones, and proactive alignment with high-standard international trade and economic rules, injecting new momentum into a higher level of opening up.Market news: The Saudi Foreign Minister spoke with the US Secretary of State to discuss Irans regional aggression.

As the USD/JPY currency pair nears 137.00, the policy gulf between the Fed and the BOJ widens

Alina Haynes

Jul 25, 2022 11:43

The US dollar pushed higher against the Japanese yen on Wednesday as investors gambled on a wider policy gulf between the Federal Reserve and the Bank of Japan. Since a small rebound around 136.00 on Friday, the asst has been making steady progress toward the pivotal level of 137.00.

On Wednesday, the Fed is likely to raise interest rates to 2.5 percent from their current level of 1.75%. Fed Chair Jerome Powell may announce a rate hike of 75 basis points to combat inflation (bps). At one point, when price pressures were in the double digits, the likelihood of a rate hike of even 1 percent was widely considered a certainty. Long-term inflation expectations fell to 2.8% in July from 3.1% in June, and Wall Street profit growth was weak, forcing the Fed to delay an increase in interest rates.

Meanwhile, last week's release of Japan's Consumer Price Index gave hope to those who buy the yen (CPI). After being reported at 2.5%, the National CPI has been revised down to 2.4%. Although core CPI rose from 0.8% to 1.0% since the last report. As long as food and energy costs stayed over 2 percent, the BOJ remained worried. Officials at the Bank of Japan (BOJ) are likely to be pleased with the recent uptick in demand for durable goods.

The increasing core CPI in Japan has little bearing on whether or not BOJ Governor Haruhiko Kuroda would make a hawkish remark. The Bank of Japan (BOJ) has promised to keep pumping money into the economy and to sustain its dovish tone.

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