Former BOJ Member: The Window for BOJ Rate Hike is Narrowing
Sayuri Shirai, a former member of the Bank of Japan's committee, stated that if the bank wishes to raise interest rates further, it may need to act within this year, or the window of opportunity will close. Japan's weak domestic demand provides insufficient justification for a rate hike, and if the inflation rate falls below the bank's 2% target, it will be even more challenging to proceed with a rate increase. She said, "The Bank of Japan may want to normalize policy as much as possible in a timely manner, even if it can only slightly correct the excessive depreciation of the yen. However, Japan's economy is too weak, and fragile domestic demand is incompatible with a rate hike path." Although Japan's wage growth shows positive signs, persistent inflation suppresses household spending. The latest government data shows that private consumption was flat from January to March. The central bank expects that in the next fiscal year starting April 2026 and subsequent years, consumer inflation will slow to below 2%, which Shirai believes will complicate further rate hike decisions. Growth headwinds are also intensifying, with Japan facing the risk of a technical recession after economic contraction in the first quarter, and exports to the U.S. in April fell for the first time in four months, highlighting the impact of high tariffs. (Jin10)
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BUZZ - Broker Perspectives: Analysts Express Doubts Over Starbucks and Chipotle Acquisition
Latest Update October 9 – The Financial Times reported on Thursday that Starbucks (SBUX.O) has explored a potential acquisition of Chipotle (CMG.N). This move would bring CEO Brian Niccol back to the Mexican burrito chain he once led. Starbucks declined to comment, saying the company remains "fully focused" on its business turnaround. Chipotle's stock fell about 4% to $31.32 on Friday, after surging 6.2% in the previous trading session. Limited strategic rationale BTIG expressed "high skepticism," stating that the deal does not make sense operationally, would cause significant dilution for Starbucks shareholders, and would disrupt management operations. "Over the years we've heard many stories about multi-brand acquisitions... but few have materialized, and even fewer have succeeded," BTIG noted. William Blair pointed out that Starbucks’ $9.4 billion net debt as of June makes it difficult to finance an acquisition and could push the combined company’s leverage ratio to about six times—considered high for the restaurant industry. D.A. Davidson stated the probability of the deal succeeding is 20% or less, given the significant differences between the brands and the apparent lack of clear synergies. Raymond James noted that due to the low overlap in menus, supply chain benefits are likely limited, while performance among multi-brand restaurant platforms has been mixed. eMarketer’s Suzy Davidkhanian commented that Niccol's familiarity may reduce execution risk, but investors might still see the deal as a "costly distraction" during Starbucks’ transformation. (For the convenience of non-English speakers, Reuters automatically translates its reports into several other languages. Automated translation may be inaccurate or fail to include necessary context; Reuters does not guarantee the accuracy of automated translated text and provides it solely for readers’ convenience. Reuters accepts no responsibility for any damage or loss resulting from the use of automated translation functions.)
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