Latest news with #Uchida
Yahoo
3 hours ago
- Business
- Yahoo
Dollar Supported by Reduced Trade Tensions and Higher Bond Yields
The dollar index (DXY00) today is up by +0.10%. The dollar is climbing today on reduced global trade tensions after the US agreed to a trade deal with Japan. Strength in T-note yields today has also improved the dollar's interest rate differentials. Gains in the dollar are limited after US existing home sales fell more than expected to a 9-month low. US June existing home sales fell -2.7% m/m to a 9-month low of 3.93 million, weaker than expectations of -0.7% to 4.00 million. More News from Barchart Dollar Falls due to Lower T-note Yields Dollar Weakens and Gold Rallies as T-note Yields Slide Will Metals Stay in the Spotlight Wednesday? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 5% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17. EUR/USD (^EURUSD) today is down by -0.24%. The euro is under pressure today from a stronger dollar. The euro is also weighed down by a Bloomberg report that stated the European Union plans to impose 30% tariffs on approximately $117 billion (100 billion euros) worth of US goods in the event that President Trump raises tariffs on EU goods if no trade deal with the US is reached by August 1. Swaps are pricing in a 1% chance of a -25 bp rate cut by the ECB at Thursday's policy meeting. USD/JPY (^USDJPY) today is down by -0.05%. The yen rose to a 1.5-week high against the dollar today after the US and Japan reached a trade agreement. The yen also garnered support today on hawkish comments from BOJ Deputy Governor Uchida, which pushed the 10-year JGB bond yield up to a 16-year high of 1.616%. This was prompted by his statement that the trade deal between the US and Japan brings the BOJ closer to raising interest rates. Higher T-note yields today are limiting gains in the yen. The upside in the yen in the near term may be limited due to concerns that the LDP's loss of its majority in Japan's upper house in Sunday's elections may lead to fiscal deterioration in Japan's government finances, as the government boosts spending and implements tax cuts. BOJ Deputy Governor Uchida said "uncertainty has receded" after a trade deal was made with Japan and the US, which will push the BOJ closer to a rate hike by boosting the prospects for suitable economic conditions. President Trump late Tuesday announced a trade deal with Japan that will impose 15% tariffs on US imports from Japan, lower than the 25% rate that had been previously flagged to start on August 1, while creating a $550 billion fund for Japan to make investments in the US. Japan also agreed to purchase 100 Boeing aircraft, increase its purchases of US rice by 75%, and buy $8 billion in other agricultural products, while raising its defense spending with American firms to $17 billion annually, from $14 billion. August gold (GCQ25) today is down -21.2 (-0.62%), and September silver (SIU25) is up +0.200 (+0.51%). Precious metals today are mixed, with Sep silver posting a contract high and nearest-futures (N25) silver posting a 14-year high. Gold prices fell from a 5-week high today and turned lower as global trade tensions eased after the US and Japan agreed to a trade deal. Dollar strength today and higher global bond yields are also weighing on precious metals. Hawkish comments today from BOJ Deputy Governor Uchida undercut precious metals when he said the trade deal between Japan and the US pushes the BOJ closer to a rate hike. Silver prices fell back from their best levels after US existing home sales fell more than expected to a 9-month low, a negative factor for industrial metals demand. Precious metals continue to receive safe-haven support from geopolitical risks, including the conflicts in Ukraine and the Middle East. Fund buying of precious metals continues to support prices after gold holdings in ETFs rose to a two-year high on Tuesday, and silver holdings in ETFs climbed to a three-year high on Tuesday. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
14 hours ago
- Business
- Business Times
BOJ sees trade deal as raising chance of meeting inflation goal
[TOKYO] Japan's trade deal with the US has reduced uncertainty surrounding the economy, the central bank's deputy governor Shinichi Uchida said, signalling optimism that conditions for resuming interest rate hikes may start to fall in place. Uchida's remark came hours after US President Donald Trump announced a trade deal with Tokyo that cuts tariffs on Japan's mainstay automobile imports and spares Tokyo punishing new levies on some other goods. 'It's a very big progress that reduces uncertainty for Japan's economy,' Uchida said on Wednesday (Jul 23), adding that the BOJ will incorporate the deal in its quarterly growth and price projections due at the next policy meeting on July 30-31. 'Given the receding uncertainty, by definition it can be said that the likelihood of Japan durably achieving 2 per cent inflation has heightened,' Uchida told a news conference. BOJ policymakers have repeatedly said they need to be more convinced that inflation will sustainably hit its 2 per cent target before raising interest rates further. While there was still some uncertainty on how the tariffs could affect domestic and overseas economies, the BOJ was looking at both upside and downside risks to economic activity and prices, Uchida said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The BOJ needs to adjust monetary policy to best balance upside and downside risks from the perspective of maintaining economic and price stability,' Uchida said in an earlier speech to business leaders in the southern west city of Kochi. He reiterated the BOJ's resolve to continue raising interest rates if the economy and prices move in line with its forecasts. Sources have told Reuters the BOJ's next quarterly report will warn of uncertainty over the impact of US tariffs, but may offer a less gloomy view on the near-term hit to the economy than three months ago, when market volatility was at its peak. Uchida said the trade deal would hugely reduce uncertainty for companies and, coupled with intensifying labour shortages, prod them to continue to hike wages. The BOJ expects underlying inflation, or price rises driven by strength in domestic demand, to reach its 2 per cent target around the latter half of fiscal 2026 through 2027, he added. While media reports that Prime Minister Shigeru Ishiba may step down could add to political uncertainty, receding worries about a US-Japan trade deal led some analysts to predict the chance of another rate hike by the end of this year. 'The trade deal with the US announced today removes a key downside risk to Japan's economy,' said Marcel Thieliant, head of Asia-Pacific at Capital Economics. 'And while the potential resignation of Ishiba creates political risks, our conviction that the Bank of Japan will resume its tightening cycle before the end of the year has risen,' Thieliant said. A Reuters poll showed a majority of economists expect the BOJ to raise its key interest rate again by year-end, though most expect the bank to stand pat at this month's meeting. REUTERS
14 hours ago
- Business
Japanese, Overseas Economies at Critical Juncture: BOJ Uchida
News from Japan Economy Jul 23, 2025 16:06 (JST) Kochi, July 23 (Jiji Press)--Japanese and overseas economies seem to be at a critical juncture, Bank of Japan Deputy Governor Shinichi Uchida said Wednesday, citing extremely high uncertainty over U.S. tariff measures. In a speech in the western city of Kochi, he also said, "Profits in the corporate sector overall will continue to be at a high level" on the assumption that U.S. tariff talks with trade partners will progress to some extent. On monetary policy, he stated that the BOJ "will continue to raise the policy interest rate and adjust the degree of monetary accommodation" in accordance with improvement in economic activity and prices. Still, as the outlook for economic activity and prices entails high uncertainty, Uchida said that the central bank "needs to adjust monetary policy to best balance the upside and downside risks." He also emphasized the need for "a certain degree of flexibility to prepare for unexpected developments" over the reduction in the BOJ's purchases of Japanese government bonds that has been implemented since last August as part of its monetary policy normalization. [Copyright The Jiji Press, Ltd.] Jiji Press
Japan Today
15 hours ago
- Business
- Japan Today
BOJ deputy chief signals further rate hikes
The two buildings hosting the Bank of Japan. One of the Bank of Japan's deputy chiefs on Wednesday reiterated the bank's readiness to pursue a path toward monetary normalization if the Japanese economy and inflation move in line with expectations, while noting uncertainties regarding U.S. tariffs. "Given that real interest rates are at significantly low bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate," BOJ Deputy Governor Shinichi Uchida said in a speech in Kochi, western Japan. Saying it is not yet clear how economic activity and prices at home and abroad will develop, Uchida said he will pay close attention to the economic data "as there are extremely high uncertainties and as domestic and overseas economies seem to be at a critical juncture." Uchida's remarks came hours after U.S. President Donald Trump said that he has struck a "massive" trade deal with Japan, under which Tokyo has agreed to a "reciprocal tariff" of 15 percent, lower than earlier proposed. In his speech, Uchida did not directly address the newly announced deal. Expressing concern about the potential downward pressure on prices in Japan from U.S. trade policy, Uchida also noted upward pressure from cost-push factors, particularly in food prices. "My attention will therefore be on how such upward and downward pressure may affect the outlook for prices through, for example, firms' wage- and price-setting behavior." The BOJ has shifted from a decade of unorthodox easing, lifting its key rate three times since March last year. But the central bank kept its benchmark rate unchanged at 0.5 percent at its June policy meeting, the third straight gathering without a policy adjustment, with Trump's tariffs clouding the outlook for Japan's export-oriented economy. The BOJ will hold a two-day policy meeting from July 30, during which it is set to issue its updated quarterly outlook for growth and inflation. © KYODO
The Mainichi
16 hours ago
- Business
- The Mainichi
BOJ deputy chief signals further rate hikes
KOCHI (Kyodo) -- One of the Bank of Japan's deputy chiefs on Wednesday reiterated the bank's readiness to pursue a path toward monetary normalization if the Japanese economy and inflation move in line with expectations, while noting uncertainties regarding U.S. tariffs. "Given that real interest rates are at significantly low bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate," BOJ Deputy Governor Shinichi Uchida said in a speech in Kochi, western Japan. Saying it is not yet clear how economic activity and prices at home and abroad will develop, Uchida said he will pay close attention to the economic data "as there are extremely high uncertainties and as domestic and overseas economies seem to be at a critical juncture." Uchida's remarks came hours after U.S. President Donald Trump said that he has struck a "massive" trade deal with Japan, under which Tokyo has agreed to a "reciprocal tariff" of 15 percent, lower than earlier proposed. In his speech, Uchida did not directly address the newly announced deal. Expressing concern about the potential downward pressure on prices in Japan from U.S. trade policy, Uchida also noted upward pressure from cost-push factors, particularly in food prices. "My attention will therefore be on how such upward and downward pressure may affect the outlook for prices through, for example, firms' wage- and price-setting behavior." The BOJ has shifted from a decade of unorthodox easing, lifting its key rate three times since March last year. But the central bank kept its benchmark rate unchanged at 0.5 percent at its June policy meeting, the third straight gathering without a policy adjustment, with Trump's tariffs clouding the outlook for Japan's export-oriented economy. The BOJ will hold a two-day policy meeting from July 30, during which it is set to issue its updated quarterly outlook for growth and inflation.
