Business Lookahead: Eyes on the Bank of Japan

8 個月前

STORY: From Japan possibly moving away from negative interest rates to why the BoE may play for time, these are the stories to watch for in business and finance over the coming days

A two-day monetary policy meeting of Japan's central bank begins on Monday.

The stars could finally be aligning for Japan to move away from negative interest rates and overhaul its massive stimulus program.

Recent comments from BOJ officials, including Governor Kazuo Ueda, also seem to signal an imminent end to years of ultra-loose monetary policy.

Markets are priced for an exit by June.

Wednesday's Fed meeting is all about gauging policymakers' views on the timing of rate cuts, the resilience of the U.S. economy and the possibility of an inflationary rebound.

Robust jobs and inflation data has prompted a rethink of how much policymakers will lower rates this year.

That hasn’t stopped a rally that’s taken the S&P 500 to fresh records.

A hawkish Powell tilt, however, could give investors pause.

The Bank of England will likely play for time in Thursday's rate announcement as it awaits greater clarity on wage growth.

The BoE is expected to start cutting borrowing costs from 5.25% in August, a Reuters poll showed.

That's potentially behind both the Fed and the European Central Bank.

Wednesday's inflation reading could lead to a last-minute rethink, though.

In contrast to the U.S., economic growth is sluggish in many other major economies.

But flash PMI or business activity numbers due in the coming days could confirm the view that the global economy outside the U.S. is not as bad as it might first seem.

While the February euro zone composite PMI remained below the 50 mark that separates expansions from contraction, the index came in above market consensus.

And Britain's manufacturing PMI, stuck below the threshold for growth since August 2022, is now edging higher.