- In the first of three key central bank meetings this week the Bank of Japan raised its benchmark rate and released plans to halve its bond purchases in a bid to normalise policy. The BoJ raised its policy rate to around 0.25% from a range of 0% to 0.1% and said that it would reduce its monthly pace of bond buying to around JPY 3 trillion by the first quarter of 2026. A hike has been predicted for a while but there was always a question around the timing, with today’s hike pushing USDJPY to gyrate wildly around the time of the announcement, whipping between 151.64 and 153.88 before settling below 153 at the time of writing.
- The US remains in focus later today with Fed officials likely to move closer to lowering interest rates from a two-decade high, possibly telegraphing a September cut when they conclude their two-day policy meeting later today. Most analysts believe that rate setters on the FOMC are likely to vote to keep rates unchanged in a range of 5.25% to 5.5%, a peak reached a year ago. Whilst inflation is moving in the right direction towards the central bank’s 2% target, unemployment is edging higher, so officials are likely to agree to pause whilst changing language in the statement to suggest a cut at the September policy meeting. Chairman Powell holds his press conference 30 minutes after the announcement and will likely be pushed by reporters to comment on the outlook for the September meeting. Be prepared for the Chairman to roll out his standard responses, such as the Fed’s policy path will be “data dependant” and the committee decides on policy “meeting by meeting.”
We are using cookies to give you the best experience on our website. Download the GPS Cookies Policy for more information. The main types of cookies we use are as follows: strictly necessary cookies, performance cookies, advertisement cookies, and analytics cookies. You can find out more about which cookies we are using or switch them off in settings. Except for strictly essential cookies, you have also the option to decline the usage of cookies at any time. You can do this through this cookie management panel, which appears when you first visit, and you can access it independently through the link provided at the foot of the page.