Gold Prices Pull Back After Record Highs as January Rally Remains Strong 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
South Korea Exports Surge in January on AI Chip Demand, Marking Fastest Growth in 4.5 Years 
U.S. Government Faces Brief Shutdown as Congress Delays Funding Deal 
Bank of Japan Signals Cautious Path Toward Further Rate Hikes Amid Yen Weakness 
China Factory Activity Slips in January as Weak Demand Weighs on Growth Outlook 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
U.S. Prosecutors Investigate Fed Chair Jerome Powell Over Headquarters Renovation 
Trump to Announce New Federal Reserve Chair Pick as Powell Replacement Looms 
Oil Prices Surge Toward Biggest Monthly Gains in Years Amid Middle East Tensions 
Asian Currencies Hold Firm as Dollar Rebounds on Fed Chair Nomination Hopes 
Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
Trump Threatens 50% Tariff on Canadian Aircraft Amid Escalating U.S.-Canada Trade Dispute 
The Bank of Japan’s rate-hike cycle is under intense pressure as U.S. President Donald Trump’s new tariffs threaten Japan’s export-reliant economy. BOJ Governor Kazuo Ueda, after keeping interest rates steady at 0.5%, warned that inflation is taking longer than expected to hit the central bank’s 2% target, signaling a pause in further hikes.
Despite the hold, rising food prices, persistent wage growth, and yen depreciation could keep the door open for future hikes. Headline inflation hit 3.6% in March, driven by soaring rice costs and other food staples. Ueda acknowledged the surprise persistence of food inflation, which the BOJ now warns may cause broader, longer-term price increases.
Still, Ueda cited “extremely high uncertainty” over the global outlook, as the BOJ downgraded its growth and inflation forecasts. Analysts say a weak yen—now at its lowest since April—could intensify inflation and provoke political pressure, particularly from Trump, who accuses Japan of manipulating its currency.
Goldman Sachs pushed its forecast for the next rate hike to January 2026 but still expects the policy rate to eventually reach 1.5%. Morgan Stanley, meanwhile, sees rates remaining on hold until the end of 2025, unless yen weakness or domestic inflation forces earlier action.
With inflation above target for three years, Japan’s path to policy normalization remains fragile. The BOJ is likely to maintain a hawkish tone without committing to a timeline, navigating between slowing global trade, political pressure, and persistent domestic price risks.
