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March 24 – The head of Irans National Emergency Management Organization stated on the 24th that attacks launched by the United States and Israel since the outbreak of this round of conflict have resulted in the deaths of 208 minors under the age of 18 in Iran. Among them, 168 students were killed in an attack on a girls school in Minab, southern Iran. Furthermore, 13 of the dead were under the age of 5, the youngest being only 3 days old.On March 24th, European Central Bank (ECB) Governing Council member Aleksandar Vujicic (who will become ECB Vice President in June) stated that the ECB must maintain "a high degree of flexibility and vigilance" to control prices, as the risk of stagflation stemming from the Iran war is looming. Vujic indicated that officials will likely soon know whether the impact of the conflict will necessitate an interest rate hike. However, he also warned that recent developments suggest a growing danger of persistently rising consumer prices coupled with weak economic expansion. "We are not currently seeing stagflation, but the risks are moving in that direction. How far we go in this trend is difficult to predict. There will be a lot of new data and information released before the April meeting; in the current situation, everything is being updated in real time."Bank of Japan Governor Kazuo Ueda: We pledge to provide policy guidance aimed at achieving stable inflation and wage growth.Bank of Japan Governor Kazuo Ueda: Although food prices may temporarily decline, the impact of freezing food sales tax in the short term on inflation expectations may be limited.ECB Governing Council member Vujicic: The ECB must be wary of the risk of stagflation.

Because of bad news on Australian exports, the AUD/JPY has dropped to roughly 97.00

Alina Haynes

Sep 08, 2022 15:52

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The Australian Bureau of Statistics' announcement of disappointing trade data has sent the AUD/JPY currency pair plunging. Since Australian exports have dropped so significantly, the cross has depreciated to around 97.00. Monthly export figures for the commodity-linked currency fell 9.9 percent, well below the expansion of 5.0 percent that had been predicted. There was also an increase of 5.2% in imports, up from 0.7% in the prior report. The Trade Balance is at $8,733m, down substantially from the forecasted $14,500m.

 

The Australian dollar has risen this week against the Japanese yen due to a number of factors. First, the Official Cash Rate (OCR) in Australia was raised to 2.85% by the Reserve Bank of Australia (RBA), marking the fourth consecutive increase of 50 basis points. RBA Governor Philip Lowe has maintained the central bank's "restrictive" stance on interest rates since inflationary pressures in the Australian economy have not peaked.

 

The RBA included a strategy for bringing inflation down to target levels in its announced monetary policy. Advice on interest rates and inflationary pressures deserved rigorous scrutiny. OCE hike forecasted by RBA policymakers to 3.85%. Inflation will reach its highest point of about 7% before beginning to fall the following year. Naturally, this will deepen the existing gulf in policy stances between Australia's Reserve Bank and Japan's Bank of Japan (BOJ).

 

The next step is the release of conflicting GDP estimates. Australia's quarterly GDP came in at 0.9%, which was below expectations of 1% but higher than the prior announcement of 0.8%. The yearly figure, however, has increased to 3.6% from the estimated 3.5% and the prior print of 3.3%.

 

Optimistic GDP data in Japan have supported the bulls in the Tokyo currency market. When compared to forecasts of 2.9% and the prior figure of 2.2% on an annualized basis, the latest economic data shows a significant increase to 3.5%. Furthermore, quarterly data have been recorded at 0.9%, which is above both the 0.7% forecast and the 0.5% previous report.

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