Asian Stocks Slide as AI Valuation Fears and BOJ Uncertainty Weigh on Markets 
RBA Unlikely to Cut Interest Rates in 2026 as Inflation Pressures Persist, Says Westpac 
Oil Prices Slip in Asia as 2026 Supply Glut Fears and Russia-Ukraine Talks Weigh on Markets 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Asian Stocks Edge Higher as Tech Recovers, U.S. Economic Uncertainty Caps Gains 
Dollar Holds Firm Ahead of Global Central Bank Decisions as Yen, Sterling and Euro React 
Australian Consumer Sentiment Slumps in Early December as Inflation Fears Resurface 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
U.S. Stock Futures Edge Higher as Micron Earnings Boost AI Sentiment Ahead of CPI Data 
South Korea Warns Weak Won Could Push Inflation Higher in 2025 
Trump Orders Blockade of Sanctioned Oil Tankers, Raising Venezuela Tensions and Oil Prices 
The Bank of Japan (BoJ) in its November 1 monetary policy meeting mentioned its optimism over the growth of the economy, with a moderate rate of recovery observed in the global demand. The central bank is expected to maintain an easing bias, but shall not remain compelled to ease in the medium term.
We foresee that the USD/JPY currency pair will test the 130 level towards the end of 2017, for the first time since April 2002. Also, the 10-year Treasury yield spread will likely widen, at over 250 basis points for the first time since 2010.
The BoJ aims at achieving the 2 percent inflation target with expectations of buying around JPY80 trillion of government bonds per year. Upward pressure on global yields since the US election could potentially mean more QE, though.
If Trump successfully implements his fiscal plan, consumer inflation will surely rise, giving the Federal Reserve wider space for an interest rate hike. Thereby, rising Fed fund rate will increase the cost of borrowing. After the Presidential election result, JPY witnessed a massive selling against U.S. dollar, sending the USD/JPY higher by 17 percent to 118.67 in just a month’s time.
Lastly, the BoJ’s first two-day monetary policy meeting for 2017 will take place on January 30-31. We foresee that the central will remain committed to holding its 10-year JGB yields near zero, while keeping interest rate steady at -0.10 percent.
