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Government softening line with bank -


Have I understood the hint correctly-Japan possibly raising interest rates as early as next week?

March could prove a very interesting month for our rates: an increase in US rates likely on 28/3 (and all the attendent pressures associated with US rates passing ours) and ECB increases next week could set the tone nicely for the rest of the year.

Over the weekend Kaoru Yosano, the economic and fiscal policy minister, said

that serious deflation was now over and that it was "fine" for the central bank

to use its judgement to end its current policy if the conditions are met.

That raised market expectations that the Bank of Japan will start mopping up

excess liquidity in the financial system by April and possibly even as soon as

its meeting next week.

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IMHO the UK is hyper IR sensitive given the amount of debt that is being funded. We should not underestimate the impact of a .25% rate in Japan as the knock-on effect through the wholesale markets will be quite dramatic. I agree that the psychological and actual impact of the US moving ahead of the B o E in March will be interesting.

The worldwide trend in IR is up and nothing works like tightening credit on inflated markets. The next hike may resemble a long and very sharp needle.

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Japanese stocks have had a rollercoaster ride this year, as foreign investors have fretted about what will happen to corporate profits when the Bank of Japan breaks the habit of six years by raising interest rates above zero, which observers expect to happen this year.

Analysts inside and outside the country do not want the BoJ to be too trigger-happy. They remember 2000, when the bank helped to nip a nascent recovery in the bud by a premature tightening of monetary policy - a decision that left share prices as well as the economy languishing for another few years.


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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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