Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
The Bank of Japan (BOJ) raised interest rates on Wednesday and introduced a detailed quantitative tightening (QT) plan, marking a significant step towards phasing out a decade of massive stimulus.
Key Decisions:
- Interest Rates: BOJ raised the overnight call rate target to 0.25% from 0%-0.1%, a level not seen since 2008.
- Quantitative Tightening: The BOJ will halve its monthly bond purchases to ¥3 trillion (RM90.56 billion) starting January-March 2026, down from ¥6 trillion.
Market Reaction:
- Currency: The yen initially rallied 0.8% to a three-month high of 151.58 per dollar but later reversed gains.
- Bonds: Yields on 10-year Japanese government bonds fell slightly following the announcement.
Economic Outlook:
- The BOJ cited broadening wage hikes and rising import prices as reasons for the rate increase.
- The decision aligns with rising inflation expectations and a need for vigilant inflation risk management.
Comments from Economists:
- Fred Neumann, chief Asia economist at HSBC, noted, "The BOJ is on course to tighten further, with another interest hike likely by the start of next year."
Projections and Future Plans:
- The BOJ's quarterly outlook maintained the projection that inflation would stay around 2% through fiscal 2026.
- Governor Kazuo Ueda is expected to further explain the decision at a press conference.
Context:
- The decision comes as the US Federal Reserve considers cutting interest rates, potentially reversing its aggressive rate-hike cycle.
- The BOJ had ended negative rates and bond yield control in March, shifting away from its radical stimulus programme.
The BOJ's move is seen as a decisive step in normalizing monetary policy, signaling a potential path for further rate hikes if economic conditions continue to align with their projections.
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