Will the RBA raise rates again? Unless prices surge over summer, it's looking less likely 
If central banks don't start cutting them soon, it could actually increase inflation 
The Federal Reserve held off hiking interest rates 
Why central banks should stop raising interest rates 
The Federal Reserve and the art of navigating a soft landing ... when economic data sends mixed signals 
The RBA has kept interest rates on hold. Here's why it'll be cautious from here on 
The yen plunges to 34-year low despite interest rate hike 
Interest rates: Monetary policy is always political as central banks opt to back the financial sector 
Driver of the yen remains outside Japan as the BoJ remained sidelined at the last week's meeting, whereas the improving risk sentiment and general USD strength brought USDJPY back to 124. Given eased concerns on Greece and stabilization in Chinese stock markets, the Fed hike outlook will continue to be the key driver of USDJPY. Having said that, Japan's Q2 growth picture has deteriorated recently.
Barclays notes:
- Given the subdued May Composite Index of Consumption, we forecast Q2 real GDP has shrunk by 0.5% q/q saar, or the first negative reading in three quarters.
- While we expect growth to turn positive in Q3 with rising wages supporting consumption, economic data will be closely watched to determine the economic outlook.
- This week, Japan will release May Index of All-Industry Activity (Wednesday) and June Trade Balance (Thursday). We expect May Index of All-Industry Activity to drop -0.8% m/m (consensus: -0.6%) while we look for June trade balance (nsa) to return to a surplus of JPY183bn (consensus: JPY46trn) with solid increase in exports and continued decline in imports.
