Investment Strategy - RBC BlueBay Asset Management has established a long yen position [1] - The firm anticipates that Japan's political transition and a potential Bank of Japan rate hike in October could strengthen the yen [1]

Monetary Policy Stance - Bank of Japan (BoJ) board member reaffirms commitment to continue lifting interest rates if conditions permit [1] - Uncertainties related to trade are cited as a factor influencing monetary policy decisions [1]

Market Reaction & Rate Cut Probability - Market exuberance is noted, particularly in riskier, speculative market segments, following Powell's speech [4] - Market assigned approximately 80% probability of a rate cut in September prior to the speech, which increased to 85-86% during the conversation [4][5] - Market reactions should be considered, but the market is not always right [2][3] Inflation & Tariffs - Tariffs have begun to increase prices in some goods categories, with accumulating effects expected over the coming months [1] - Tariff inflation is likened to the "tariff Titanic" hitting the "inflation iceberg," suggesting significant impact [5] - Core inflation is projected to exceed 3% by year-end, influenced by both tariffs and service-side inflation [6] - The Federal Reserve acknowledges tariff inflation is coming through, as reflected in PPI (Producer Price Index) [11][12] Federal Reserve & Monetary Policy - Powell's speech emphasized balance, assessing both upside risks for inflation and downside risks for the labor market [2] - The Federal Reserve faces a dilemma balancing concerns about the labor market with rising inflation [7] - The Federal Reserve might not need to be as concerned about the labor market as expressed in the speech, given supply-side factors [7][8] - The Federal Reserve can choose to view inflation data differently and utilize various measures to justify a rate cut [12][13] Labor Market - The unemployment rate is at 42%, consistent with the rate a year prior [8]

A Bank of Japan board member hinted that the BOJ may be moving toward another rate hike by the end of the year depending on the impact from US tariffs, according to a summary of opinions from the bank’s policy meeting last week https://t.co/CBwgbF0RAu ...

The Bank of Japan’s rate hike cycle will resume after “only” a temporary pause, Board Member Hajime Takata warned https://t.co/o6tlqb45K3 ...