- Tunisia readies for vote as incumbent Saied eyes victory
- High childcare costs in US weigh on women's employment
- US voters seek help with crushing childcare costs
- Taiwan shuts down for second day as Typhoon Krathon to land
- Supercharged storms: how climate change amplifies cyclones
- Biden official urges talks as US port strike enters second day
- Huge protests in Argentina over public university cuts
- Rally in oil prices loses steam on mixed day for global stocks
- South America treated to rare 'ring of fire' eclipse
- Biden official says port strike deal not as far as parties think
- Mexico's new president offers apology for 1968 student massacre
- Historic funding round values OpenAI at $157 billion
- Mixed US car sales in Q3 as industry hopes for post-election bounce
- Thunderstorms are a 'boiling pot' of gamma rays, scientists find
- Scientists unlock secret of 'Girl With Pearl Earring'
- Dolphins flash friendly grins when they're ready to play
- Facing backlash, EU moves to delay deforestation rules
- US private sector adds more jobs than expected in September: ADP
- Boys out of critical condition after Zurich stabbings
- Spain logs record summer tourism as inflow draws protests
- Hedi Slimane quits as Celine's artistic director
- Oil prices extend rally on Iran attack
- Spain welcomed record number of tourists this summer
- France says coming tax hikes on the wealthy to be 'temporary'
- Why are Thailand's roads so deadly?
- Oracle to invest $6.5 bn in Malaysian cloud services region
- Parkrun marks 20 years of a free weekly jog, run... or walk
- Oil extends rally after Iran attack, Hong Kong soars again
- Prostitutes, prospectors drive spread in DR Congo mpox capital
- Oil extends rally after Iran attack, Hong Kong resumes surge
- Extreme heat another form of death sentence in Texas jails
- Can music help plants grow? Study suggests sound boosts fungus
- Nike earnings drop, says turnaround will take time
- US dockworkers launch mass strike a month before election
- Iron Dome: Israel's key anti-missile shield
- Cranes stand still as US dockworkers fight for 'future'
- GM reports US sales dip, but says EVs grew
- Sheinbaum takes office as Mexico's first woman president
- Webb telescope detects carbon dioxide on Pluto's largest moon
- Stock markets slump, oil jumps on Middle East concerns
- French PM vows more taxes and spending cuts ahead of budget fight
- Germany inaugurates IBM's first European quantum data centre
- Stock markets diverge as eurozone inflation drops further
- France's richest man takes control of Paris Match magazine
- Anger meets tear gas as Nigeria hardship protests fizzle out
- US dockworkers launch mass strike month before election
- Evacuations from Lebanon: what we know
- Feathers fly at Chanel's Paris fashion return
- UAE oil giant ADNOC swoops on German chemicals firm Covestro
- Eurozone inflation falls under 2% for first time since 2021
RBGPF | -2.18% | 59.5 | $ | |
CMSD | -0.04% | 24.93 | $ | |
SCS | -2.56% | 12.87 | $ | |
BCC | -1.33% | 139.53 | $ | |
BCE | -1.13% | 34.44 | $ | |
NGG | -1.85% | 68.78 | $ | |
RIO | -0.48% | 70.82 | $ | |
CMSC | 0.04% | 24.78 | $ | |
RYCEF | -0.43% | 6.9 | $ | |
JRI | -1.12% | 13.38 | $ | |
RELX | -0.11% | 47.29 | $ | |
GSK | -2.15% | 39.45 | $ | |
VOD | -2.16% | 9.74 | $ | |
BTI | -1.33% | 35.97 | $ | |
AZN | 1.14% | 79.58 | $ | |
BP | 0.86% | 32.37 | $ |
Bank of Japan keeps easing despite global rate hikes
The Bank of Japan on Friday stuck to its monetary easing policy even as other central banks raise interest rates to tame inflation, but said it would "pay due attention" to forex markets as the yen struggles at a 24-year low.
The decision to hold rates at minus 0.1 percent -- part of a decade-old plan to boost the world's third-largest economy -- bucks a tightening trend by central banks globally aimed at battling sky-high fuel and food prices linked to the Ukraine war.
The hikes have been led by the US Federal Reserve, which this week announced its most aggressive increase in nearly 30 years and signalled more were in the pipeline.
The European Central Bank also plans to start a series of rate increases next month, the first in more than a decade, while the Bank of England announced a fifth straight increase on Thursday and Switzerland surprised markets with its own rate hike, the first since 2007.
The widening chasm between Japanese and US monetary policy this week pushed the yen to its lowest level against the dollar since 1998, a cause for increasing concern that even the central bank made reference to after its meeting Friday.
"It is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices," the BoJ said, in an unusual reference to forex movements.
After the announcement, one dollar bought 134.63 yen, up from 133.41 yen earlier in the day.
A weaker yen helps Japanese exporters as it inflates repatriated profits, noted Yoshikiyo Shimamine, executive chief economist of Dai-ichi Life Research Institute.
For the BoJ, it may be that "these benefits overwhelm the negative aspects of a cheaper yen -- high prices for imported goods, which causes people to suffer without sufficient pay rises," he told AFP.
The bank's ultra-loose monetary policy aims to achieve two-percent inflation, a target that has been stubbornly out of reach during years of price stagnation.
In April, core consumer prices hit the target for the first time since 2015, but the BoJ has cautioned that it sees recent rising prices as a temporary and volatile trend.
Inflation has been rising for months in the United States and elsewhere as buoyant demand for homes, cars and other goods clashes with supply problems caused by Covid-19 lockdowns in China and other pandemic hold-ups.
The problem became dramatically worse after Russia invaded Ukraine in February and Western nations imposed steep sanctions on Moscow, sending food and fuel prices soaring, a particular problem in resource-poor Japan.
Stephen Innes at SPI Asset Management said the BoJ may have decided that a potential rout of Tokyo stocks caused by "a hawkish pivot... could see Japanese investors worse off than the current hit to purchasing power via a weaker currency."
The statement on forex is a nod to the government's concerns over the yen's weakness, but "does not, on its own, indicate an imminent change in policy", he said.
L.K.Baumgartner--CPN