US-Iran war jeopardizes BoJ rate hike bets for March – Reuters
Heightened market volatility due to escalating oil prices amid the war in the Middle East between the United States (US), Iran, and Israel has raised concerns over the likelihood of an interest rate hike by the Bank of Japan (BoJ) in its upcoming monetary policy meeting on March 19.
According to a report from Reuters, three sources familiar with the central bank’s thinking have stated, "It’s become difficult for the BOJ to raise rates.”. The report further added that the Japanese central bank would need time to scrutinise how its “past rate hikes and the Middle East conflict affect the economy and prices”.
The Reuters report also stated that while rising oil prices may push up underlying inflation, they could hurt the economy and warrant a delay in rate hikes if the conflict persists.
The Japanese Yen (JPY) has been underperforming its peers since the day the war started. The currency is down almost 1% against the US Dollar. Given that the Japanese economy relies heavily on imports of oil to meet its energy needs, higher oil prices are an unfavorable situation for the Japanese Yen.
Meanwhile, BoJ Deputy Governor Ryozo Himino expressed confidence on Monday that the central bank could raise interest rates toward neutral, even if the headline inflation falls below 2%. However, he didn’t deliver an explicit timeframe on when the BoJ will raise borrowing rates.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
From "mining" to accelerated transformation into an AI data center operator! Cipher (CIFR.US) turns profitable in Q3 year-on-year, first HPC revenue recorded
The most significant change in Cipher Digital's third-quarter financial report, as bitcoin miners accelerate their transformation into large-scale developers and operators of high-density AI/HPC (High-Performance Computing) data centers, is the confirmation of AI/HPC leasing income for the first time.
Market Cap Surges by $1 Trillion in Nearly Four Months, 36x P/E Ratio Hits Highest Since 2008: Apple (AAPL.US) Earnings Leave No Room for Disappointment
Apple has reached its highest valuation since 2008 with a price-to-earnings ratio of 36, regaining the top spot globally with a market cap of $5.03 trillion. However, Wall Street remains cautious due to its high valuation and low growth, leaving little room for error in its earnings reports.
Quarterly refinancing statement due on Wednesday, U.S. Treasury market holds its breath for major signals
The U.S. Treasury will release its quarterly refinancing statement this Wednesday, and the market anticipates that this may be the largest adjustment to U.S. Treasury issuance guidance since the beginning of 2024. Citi even predicts that the Treasury might cut 20-year and 30-year bond issuances ahead of schedule, shifting to increase the supply of short- and medium-term bonds. However, with the proportion of Treasury bills already rising to 22%, the pressure from short-term financing and the demand for long-term borrowing are creating a dilemma for the adjustment of the issuance structure.
Crypto prices
More
