Core Viewpoint - The election of Sanna Takashi as Japan's first female president marks a significant political shift, with potential implications for the economy and financial markets [1][3]. Economic Policy - Sanna Takashi's economic stance aligns with the late former Prime Minister Shinzo Abe, promoting "Abenomics 2.0," which combines active fiscal policy with loose monetary policy [3]. - Her plan includes eliminating temporary taxes on gasoline and diesel to reduce government revenue while increasing subsidies for healthcare and small businesses, leading to a "revenue reduction and expenditure increase" fiscal expansion [3][5]. - The Bank of Japan is expected to raise interest rates twice in 2024, from -0.1% to 0.25%, and further to 0.5% in early 2025, which will increase government debt servicing costs [5]. Market Reaction - Following Takashi's election, the Nikkei index surged by 4.83%, surpassing 48,000 points, reflecting market optimism regarding liquidity expansion [7]. - Conversely, the yen depreciated by 1.83% against the dollar, breaking the 150 mark for the first time since July 31, indicating market concerns about the yen's future [7][10]. International Relations - The yen's depreciation complicates U.S.-Japan relations, as U.S. Treasury Secretary has called for yen appreciation to reduce the trade deficit, while the current situation undermines the effectiveness of U.S. tariffs on Japan [10]. - Takashi's administration may reconsider previous trade agreements, potentially leading to new negotiations or adjustments to existing tariffs, which could further strain U.S.-Japan relations [10][12]. Challenges Ahead - While "Abenomics 2.0" may provide short-term boosts to the stock market, the accumulation of debt risks, increased currency volatility, and rising trade tensions with the U.S. present significant challenges for Takashi's administration [12]. - The broader implications of her policies will influence Japan's role in the Asia-Pacific economic landscape and could have lasting effects on global economic dynamics [12].

Core Viewpoint - The Bank of Japan retains sufficient space for potential interest rate hikes but does not explicitly indicate an action for October, with a growing number of committee members suggesting the necessity for future rate increases due to high inflation levels in Japan [1][2]. Group 1: Monetary Policy Decisions - The Bank of Japan decided to maintain the benchmark interest rate at 0.5% during the September monetary policy meeting while announcing plans to reduce holdings of exchange-traded funds (ETFs) acquired during years of large-scale stimulus [1]. - A committee member expressed that it may be time to consider another rate hike, but emphasized the need to assess more data before making a decision [1][3]. - The minutes reveal that while most committee members prefer to wait for more data, the proportion of those advocating for a rate hike is gradually increasing [1][2]. Group 2: Market Reactions and Expectations - Following the release of the minutes, the probability of a rate hike at the October 30 meeting is estimated at around 70% according to overnight swap indices, although the yen slightly depreciated against the dollar, indicating that investors did not find clear signals for an imminent rate hike [2]. - A committee member suggested that raising rates in September could surprise market participants, indicating a desire for clear policy signals before any adjustments [2][3]. - The upcoming quarterly Tankan survey is expected to show improved confidence among large manufacturing firms, which could further elevate market expectations for a rate hike if confirmed [3]. Group 3: Economic Outlook - A committee member noted that concerns regarding U.S. tariff policies and overseas risks have eased in the current economic outlook assessment by the Bank of Japan [3]. - The member indicated that it may be time to return to a stance of raising policy rates based on the current economic conditions [4].

Core Points - The Bank of Japan (BOJ) has decided to maintain its policy interest rate at 0.5% and has initiated a historic move to start reducing its holdings of exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITs), marking a significant step towards exiting its ultra-loose monetary policy [1][3]. Group 1: Monetary Policy Decisions - The monetary policy committee voted 7 to 2 to keep the interest rate unchanged, with two members advocating for a 25 basis point increase to 0.75%, indicating a rise in "hawkish" sentiment within the committee [2]. - The BOJ plans to reduce its ETF and J-REITs holdings by approximately 620 billion yen (around 4.2 billion USD) annually, which suggests a very gradual approach to minimize market disruption [3]. Group 2: Inflation and Economic Indicators - Japan's core Consumer Price Index (CPI) rose by 2.7% year-on-year in August, down from 3.1% in July, influenced by government subsidies that reduced energy prices [4]. - Despite the overall CPI decline, the "core-core" CPI, which excludes both fresh food and energy, increased by 3.3%, indicating persistent underlying inflation pressures [4]. Group 3: Future Outlook and Risks - BOJ Governor Ueda stated that if economic and price forecasts are met, the bank will continue to raise interest rates, emphasizing the need to monitor domestic and international economic conditions closely [5]. - Political uncertainties, including leadership changes and potential impacts from U.S. tariff policies, are considered significant factors in the BOJ's policy evaluation [6][7].

Core Viewpoint - The Bank of Japan (BOJ) has decided to maintain its benchmark interest rate at 0.5%, awaiting clearer economic conditions amid ongoing economic and political uncertainties [1][2]. Group 1: Economic Conditions - The BOJ is assessing the impact of U.S. tariff policies on both domestic and international economies, which is influencing their decision-making process [1][2]. - Japan's economic growth may slow down due to trade policies affecting global growth, but a re-acceleration is anticipated [2]. - The latest data shows Japan's core Consumer Price Index (CPI) rose by 2.7% year-on-year in August, a significant drop from July but still above the BOJ's 2% target, indicating the need for vigilance regarding inflation [2]. Group 2: Policy Decisions - The BOJ's decision to keep rates unchanged was widely expected following the resignation of Prime Minister Shinto Abe, but two committee members voted in favor of a 25 basis point rate hike, signaling a potential acceleration in policy normalization [1][3]. - The BOJ has begun selling its holdings of ETFs and REITs, reflecting a hawkish stance that has strengthened the yen and affected the stock market [3][4]. - Analysts expect the BOJ to raise interest rates before January next year, with indications that the internal dynamics of the policy committee are shifting towards a faster normalization of monetary policy [4].

Group 1 - The Bank of Japan maintained its interest rates but unexpectedly announced the initiation of ETF sales, marking a significant step towards gradually exiting large-scale stimulus measures [1][2] - The Bank plans to sell ETFs at an annual rate of approximately 3.3 trillion yen and real estate REITs at about 5 billion yen per year, with the total ETF holdings valued at around 37 trillion yen [1][3] - Despite the large scale of the planned sales, it would take approximately 112 years to completely liquidate the ETF holdings at the current pace, indicating limited immediate market impact [1][3] Group 2 - The recent meeting signaled a clear hawkish stance from the Bank of Japan, with two dissenting votes advocating for an interest rate increase from 0.5% to 0.75%, reflecting growing internal pressure for policy normalization [2][4] - Analysts believe that while the policy shift is significant, the actual market impact is expected to be limited, with some suggesting that the clear path for ETF handling represents an important turning point [5][6] - The impact on different asset classes is anticipated to be varied, with potential structural resistance for major indices like TOPIX and Nikkei, while banks may benefit from a steeper yield curve and improved net interest margins if economic momentum remains stable [5]

Group 1 - The Bank of Japan maintained its policy interest rate at 0.50%, which aligns with market expectations, despite two committee members voting against this decision advocating for a 25 basis point hike [1] - The policy statement emphasized a moderate recovery in the economy, despite some sectors showing signs of weakness, and highlighted the need to monitor uncertainties affecting financial markets, economic activities, and prices [1] - Following the announcement, the Japanese yen strengthened, with the USD/JPY exchange rate dropping to a low of 147.211, reflecting market reactions to the central bank's stance [1] Group 2 - Analysts suggest that the decision to keep rates unchanged indicates the Bank of Japan's cautious approach amid slowing inflation and global uncertainties, signaling readiness to address external fluctuations while assessing the strength of Japan's economic recovery [2] - The narrowing interest rate differentials are expected to lead to a gradual strengthening of the yen, enhancing Japan's purchasing power and supporting domestic demand [2] - The focus is now shifting to the upcoming press conference by Governor Kazuo Ueda, which may provide further insights into the central bank's future policy direction [2]

Core Viewpoint - The Japanese yen continues to decline against the US dollar following the FOMC meeting, with the divergence in policy outlooks between the Bank of Japan (BoJ) and the Federal Reserve (Fed) likely to limit further depreciation of the low-yielding yen [1][2]. Group 1: Market Reactions and Economic Data - The yen fell for the second consecutive day, reaching its lowest level since July 7, as the dollar strengthened broadly [2]. - Japan's core machinery orders for July decreased by 4.6% month-on-month, with private sector order growth slowing from 7.6% in June to 4.9% year-on-year, which was below market expectations and exerted pressure on the yen [3]. - The Fed lowered borrowing costs for the first time since December 2024, reducing the benchmark rate by 25 basis points to a range of 4.00%-4.25%, with expectations for further cuts by the end of the year [3]. Group 2: Policy Outlook and Market Sentiment - There is a growing consensus that the BoJ will maintain its policy normalization path, contrasting with the Fed's dovish stance, which should limit the yen's depreciation [2][3]. - The tight labor market and optimistic economic outlook in Japan open the door for potential interest rate hikes by the BoJ, while geopolitical risks from the Russia-Ukraine war and Middle East conflicts may deter aggressive bearish bets on the yen [4]. - The market is focused on the upcoming two-day BoJ meeting, with expectations that rates will remain unchanged, and investors are looking for clues regarding future policy direction [4]. Group 3: Technical Analysis - The USD/JPY needs to break through the 147.40-147.50 range to support further upward movement [6]. - After breaking below the 146.30-146.20 support level, the market reversed post-FOMC meeting, breaking above the 147.00 level, although daily oscillators have not confirmed a bullish outlook [7]. - Significant downward movements may find support around the 146.20 area, with a break below exposing the overnight low near 145.50-145.45, potentially accelerating declines towards the psychological level of 145.00 [7].

Core Viewpoint - The market anticipates a rate cut by the Bank of England, potentially lowering the key interest rate to 4%, which is seen as a relief for the struggling economy [1] Group 1: Economic Context - The Bank of England has faced multiple challenges over the past five years, including Brexit, the COVID-19 pandemic, and subsequent supply-demand imbalances [1] - A combination of large-scale monetary and fiscal stimulus has led to inflation rates soaring to the highest levels in over 40 years [1] - The energy cost surge due to the Russia-Ukraine conflict has further exacerbated the economic situation [1] Group 2: Monetary Policy - The Bank of England began raising interest rates in 2021 and only started to gradually reduce borrowing costs last year [1] - Despite these efforts, inflation levels have not stabilized back to the 2% target, and new global trade barriers are complicating the economic outlook [1] - The current easing cycle is likely to be the shallowest and longest in modern history due to policymakers' extreme caution and differing opinions [1] Group 3: Currency Analysis - The technical outlook for GBP/USD remains bearish, with daily moving averages indicating a downward trend [1] - Recent death crosses have formed between the 10-day and 100-day moving averages, as well as the 30-day and 55-day moving averages [1] - The 14-day momentum indicator is still in negative territory, suggesting continued weakness in the currency [1]

Core Viewpoint - The President of the Boston Federal Reserve Bank, Susan Collins, advocates for a "patient" monetary policy approach when assessing the impact of tariffs on the economy [1] Group 1 - Collins anticipates that a gradual normalization of policy will be appropriate later this year, although her views may change significantly as events unfold [1]

Group 1 - The Bank of Japan maintains its target interest rate at 0.5%, aligning with market expectations, marking the third consecutive meeting without changes [1] - Starting from the next fiscal year, the Bank of Japan will slow down the pace of bond purchase reductions, decreasing the monthly reduction from 400 billion yen to 200 billion yen [3] - The decision to reduce bond purchases was made with an 8 to 1 vote, with one member dissenting, advocating for maintaining the current reduction pace [3] Group 2 - The Bank of Japan's decision to slow down bond purchase reductions reflects concerns over rising long-term government bond yields and market stability [4] - A mid-term review of the reduction plan will take place in June 2026, with the Bank of Japan indicating readiness to respond quickly to rising long-term rates [4] - The central bank's normalization process is critical, especially given the impact of U.S. tariffs on Japan's export-dependent economy [7] Group 3 - Japan's core consumer inflation rate reached 3.5% in April, significantly exceeding the Bank of Japan's 2% target, driven by rising food prices and labor costs [8] - Long-term bond yields in Japan have reached their highest levels since issuance, prompting speculation about potential adjustments in issuance to calm investor fears [8] - The market is closely monitoring the Bank of Japan's communications for any hints regarding future interest rate hikes [8]