Core Viewpoint - The Bank of Japan (BOJ) has maintained its interest rates but has begun to sell its risk assets, indicating a step towards exiting its large-scale stimulus program [2][5]. Group 1: Bank of Japan's Policy Actions - The BOJ decided to keep interest rates unchanged but started selling its holdings of risk assets, marking a significant move away from ultra-loose monetary policy [2][5]. - Two board members proposed raising the short-term interest rate to 0.75%, but this was not approved [2]. - BOJ Governor Kazuo Ueda noted that while the consumer price index (CPI) data is in line with expectations, there are risks of long-term food price increases pushing up core inflation [2][3]. Group 2: Economic Outlook - Ueda emphasized that future interest rate decisions will depend on the impact of U.S. tariff discussions on the Japanese economy and whether food inflation will subside [2][3]. - Despite a slight decline in exports and manufacturer profits, overall exports are stabilizing, and corporate profits and capital expenditures remain robust [2]. - The BOJ maintains its basic forecast scenario from July, expecting the economy to withstand the impact of tariff discussions, with core inflation gradually approaching the 2% target [3]. Group 3: Currency Analysis - The USD/JPY exchange rate remains strong, positioned above the daily cloud chart, indicating a bullish trend [4]. - Key support levels are identified at 147.60 and 147.10, with resistance at 148.50 and 149.00 [4]. Group 4: Market Analyst Insights - StoneX senior market analyst Matt Simpson highlighted that the BOJ's decision to reduce its ETF and REIT holdings symbolizes a significant shift away from the era of Abenomics [5]. - This action may signal a potential interest rate hike in October [5].

Group 1 - The Japanese government has urgently implemented a comprehensive plan to mitigate the negative impacts of U.S. tariff policies on its businesses and consumers [1][3] - The plan includes measures such as improving corporate consulting systems, enhancing financing support for businesses, maintaining employment, stimulating domestic consumption, transforming industrial structures, and increasing competitiveness [1][3] - Prime Minister Kishida emphasized the potential fundamental changes to the international economic order due to U.S. tariffs, particularly affecting Japan's key industries like automotive and steel [3][8] Group 2 - Specific measures include lowering gasoline prices, providing subsidies for electricity and gas, and easing conditions for employment adjustment subsidies for companies that maintain employment without layoffs [3][4] - Japan is planning to increase imports of U.S. corn as a bargaining chip in tariff negotiations, with an estimated import volume of about 11.5 million tons valued at approximately 459 billion yen in 2024 [4] - The Bank of Japan is facing uncertainty regarding its interest rate decisions due to the impact of U.S. tariffs, with expectations of maintaining the current rate at 0.5% and potentially lowering growth forecasts [6][8]