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Daiwa's Economic View - BOJ July MPM Summary of Opinions: Step closer to rate hike within 2025
8 August 2025
533 KB
PDF
BOJ's July Summary of Opinions strikes hawkish tone
Many opinions on economic activity and prices optimistic, cite upside risks
More opinions on monetary policy conduct advocate early rate hikes
Hawkish Summary of Opinions vs. dovish Governor's press conference
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Daiwa's View - Discussions within BOJ on tariffs, trade policy: At stage for mulling resumption of rate hike
6 August 2025
394 KB
PDF
Economic slowdown pressure due to tariffs may not be as strong as feared at April's meeting
Many firms plan to continue raising wages despite US tariff policies
Expect to realize outlook in which trade issues progress “without escalation”
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Daiwa's Economic View - Economy vs. inflation dilemma: Conditions for 2% trend inflation
6 August 2025
1144 KB
PDF
Conditions for 2% underlying inflation: Focus on general services, utility fees, rents, food
Need to assess economic trends, but inflation overshoot a concern BOJ's scenario of flat underlying inflation may not materialize
Market should be wary of the fact that BOJ price forecasts have been revised upwards systematically
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Daiwa's View - What are the potential obstacles to BOJ raising rates in 2025?
5 August 2025
450 KB
PDF
BOJ views autumn as the earliest timing for rate hike
A rate hike would require that mechanism in which wages and prices influence each other positively continues uninterrupted
Potential obstacles to BOJ raising rates within the year: (1) greater-than-expected deterioration in corporate business conditions from this autumn onwards, (2) extreme political instability, and (3) aggressive rate cuts by Fed due to concerns about softening of US labor market
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Daiwa's View - BOJ likely to hike rates within this year
1 August 2025
883 KB
PDF
Yen pushed up to USD/JPY150 level as BOJ decision to maintain status quo disappoints markets
This yen depreciation now biggest force for moving forward timing of interest rate hike within this year
BOJ Governor Ueda’s press conference left dovish impression, but our forecast for rate hike in Oct-Dec remains unchanged
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Daiwa's Economic View - How agreement to invest $550bn in US will impact JGB issuance
31 July 2025
407 KB
PDF
Agreement to invest $550bn in US: Japanese government allocating same amount of financial support to JBIC and NEXI to encourage Japanese companies to invest in US
$550bn (approx. Y80tn) over 3.5 years is extremely high hurdle considering past results, cautious management stance of Japanese firms
Impact on JGB issuance: Initially be limited to Y1-2.0tn in construction bonds to strengthen financial bases for JBIC and NEXI; afterwards, if investment increases, issuance of FILP bonds will increase
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Daiwa's Economic View - July BOJ MPM: One step closer to 2025 rate hike
31 July 2025
557 KB
PDF
BOJ still concerned about downside risks to economy, but uncertainty has eased
Concerned about sustained rise in food prices
Conditions may be growing more conducive to rate hike within 2025
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Daiwa's Economic View - BOJ likely to hike rates within this year: How long will rate-hiking pause last?
28 July 2025
502 KB
PDF
US/Japan trade agreement to reduce Japan’s downside risks through two pathways: (1) increased likelihood of soft landing for US economy and (2) sustainability of Japan’s export competitiveness
BOJ sees underlying inflation approaching 2%
Amidst “clearing fog,” BOJ ensuring “discretion” to hike rates as early as this autumn
Once “scheduled suspension” ends, (rate-hiking) train will resume cruising speed
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