Will the Bank of Japan keep the world’s ?

Will the Bank of Japan keep the world's ?

Will the Bank of Japan keep the world’s only negative interest rates?


A hot tin week awaits investors because of the very important decisions
of central banks around the world, about interest rates,
which is what central banks, including the Federal Reserve,
seeking to raise again in interest rates to confront high inflation,
but in light of this still, The Bank of Japan adheres to the current position
and maintains negative interest, which is currently the only one in the world,
and the meeting that ends next Thursday,
which coincides with the interest rate decision issued by
the Federal Reserve in a few hours on the same day,
and which intends to raise to 75 new basis points,
which is the third increase in interest rates. straight so far

Here are the details from the Evest platform



The position of the Japanese yen

Markets are preparing for new expected rate increases of about 0.75% from the Bank of England twice during 2022.

The European Central Bank is about to raise interest rates in the coming months









The position of the Japanese yen


The easing that Japan is heading to may cause more weakness in the yen currency,
at a time when policymakers sought to intervene quickly to save the yen,
which is currently trading against the US dollar near its lowest levels in the last 24 years,
and this is what officials confirmed that they Ready to intervene
at any time if necessary and will interfere at any time,
and the Bank of Japan sees that the weakness of
the yen is considered positive for the general economy in general,
and therefore investors find themselves confused between
the easing position in addition to the severe warnings
from currency officials inside Japan

This stated, “Kuroda” that the goal of reducing the value of
the yen needs to raise interest rates largely and exaggeratedly,
and added that raising interest rates only through sustainable inflation,
and therefore Japan at present needs more growth in wages.




Does the surprise happen?


So far, all indicators point to the steadfastness of the Bank of Japan’s
position to maintain interest rates at their current levels and perhaps lower.
Economists’ expectations indicate
that the Bank of Japan will end the last
part of the financing process to combat Covid,
and this is strongly reflected in the Bank’s tone that
links the epidemic and policy decisions And
that any firm indication of the end of the restrictions related to the epidemic
will open the way for the bank to change its orientations. Still,
expectations also indicate that there will be no change in interest rates.











Markets are preparing for new expected rate increases of about 0.75% from the Bank of England twice during 2022.


First, and as we have been used to in the past weeks,
Thursday is the day of decisions and violent statements.
It is expected by most traders and analysts in the financial markets
that this Thursday will be the beginning of a
new brightness for the euro area and the pound,
with some turmoil in the markets in this regard,
they explain This matter is as follows after the pressure on the region to which
the region is exposed due to the energy crisis, the matter has become out of control,
not to mention the unemployment crisis and other crises,
the idea of ​​raising the market to 200 basis points has become a reality,
not speculation or expectation.


Once the next three bank meeting is held,

the Bank of England is expected to raise interest rates by
three-quarters of a point in two of those meetings.
It is expected that it will be about 60% during this week,
as we mentioned at the beginning,
which allows increasing by 75 basis points,
and it is worth mentioning that this rate of raising interest did not occur since 1989
after raising borrowing costs by a full percentage point.



What are the pressures that England is going through to make concessions of this terrifying size?


First, as we mentioned (the energy crisis),
where fears have increased that Russia will reduce its gas supply until
the rise in energy prices in the United Kingdom and Europe,
which awaits it to take more serious decisions to deal
with the rise in consumer prices to 9.9,
in August this year.


It is worth noting that it was not only the Bank of England
that was forced to raise interest rates,
the European Central Bank also raised interest rates
by 75 basis points at the same pace in September,
and this was during only two meetings, and it is expected that
the Federal Reserve will make another
increase at the meeting The next day is on Wednesday,
and the odds are about 12% that it will
be able to raise prices by one full basis point.


But the Bank of England rate hike is also expected to take a reverse trend
after the Bank of England raised interest rates to their peak by mid-2023,
and analysts expect the market to move around
14 basis points by the end of next year.



The deterioration of inflation is the biggest reason for all these events.


Where said Imogen Bachra, a financial analyst for interest
rates at the Bank of England International.
The Bank of England is very concerned about
the high inflation these times,
which prompts it to address this,
even if it costs it to record more modest growth than before.
This was evident in the downward transformation of the Bank of England’s
decision made at the last August meeting of this year.


The next consolidation must mean a more
aggressive reaction than the previous one
despite the basic case supported by Imogen,
which is that the solution is the Bank of England’s
choice to raise prices by 50 basis points during this week.
Until the matter becomes clearer between our eyes,
we find that the tightening that the financial markets are taking
now means that the main interest will
be raised by about 3.75% by the end of this year,
by 4.5% by next March, or approximately 80 basis points,
which was a joke for about one month,
which means Things are getting worse than expected and
more than containing the decisions of the banks.












The European Central Bank is about to raise interest rates in the coming months


European Central Bank President Christine Lagarde said during
her speech on Tuesday that the cost of borrowing may
witness a new rise in the coming months of this year.



There is still a dispute between the officials in charge of monetary
policy in the European Central over the plan that
will be developed to follow the Fed’s footsteps and try to raise
the news by about 75 basis points during this month,
and that it is in the process of more decisive measures to curb high inflation,
but at present it is not clear A vision yet for the best interest rate level
at a time when energy costs are rising due to European sanctions on Russia



Lagarde has always emphasized the need to take action,
but this will depend primarily on the indicators of the economy,
and she also said that the level of interest rates that she will reach
and any developments will depend mainly on inflation expectations.



She also pointed out that the high inflation in Europe is not affected
by the increase in demand in the United States, and that facing the risks,
high prices and wages, needs time and added
that the current relative stability in inflation rates
was due to some measures
and it is not wise to accept the matter in this way.


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