MONEY MASTER

Based on minutes released by the  Bank of Japan  and reported by Bloomberg , policymakers are showing  growing unease over how yen weakness is feeding into inflation , a shift that could materially affect currency and asset market dynamics in 2026. While the BOJ framed its December rate hike as consistent with its economic outlook, the tone of the minutes suggests the  yen itself is becoming a policy variable , not just a by-product of rate differentials. What This Means for Markets The key takeaway is not the December hike — which markets had already priced in — but  how sensitive the BOJ is becoming to FX-driven inflation . Several board members explicitly noted that: Yen depreciation should be considered when deciding on future rate hikes FX weakness can influence  both headline and underlying inflation This raises the risk of faster or less predictable policy normalization  if the yen comes under renewed pressure. Yen Volatility Likely to Stay Elev...

Japan has renewed calls for China to broaden its outbound investment scheme, highlighting growing demand among mainland investors for exposure to Japanese equities. Satoru Shibata, an adviser to Japan’s Financial Services Agency (FSA) on China matters, voiced the request during a Tokyo forum on Friday. Citing “strong enthusiasm” from Chinese investors, Shibata emphasized the need to  expand the Qualified Domestic Institutional Investor (QDII) programme  — a key channel that enables Chinese firms to invest in overseas assets within government-imposed limits. 🗣️  "Local demand for Japanese shares is strong. A further expansion of the quota is necessary,"  Shibata said, noting that the view was his own and not official policy.  Growing Appetite Meets Limited Access Chinese interest in Japanese equities surged last year as China’s domestic stock markets faced headwinds. A buying frenzy of Japan-focused ETFs by Chinese investors triggered  trading halts and all...

Bets on aggressive monetary easing in economies like the European Central Bank (ECB) and Bank of England (BOE) are complicating the Bank of Japan’s (BOJ) efforts to raise interest rates. As central banks in advanced economies signal rate cuts, the BOJ risks standing out as the only major central bank contemplating rate hikes . BOE Governor Andrew Bailey indicated a shift toward a more active approach to lowering rates , while the ECB is facing increased speculation of aggressive rate cuts due to weak economic data in Canada and Sweden . Analysts at Evercore ISI noted that as other central banks ease rates, it becomes more challenging for the BOJ to raise its own rates. Meanwhile, the Federal Reserve 's recent 50-basis-point cut has further complicated the global outlook. Weak US jobs data in August increased the odds of more Fed action, coinciding with Japan’s recent rate hikes, which triggered a global selloff in Japanese equities . Newly appointed Prime Minister Shigeru ...