Japan Posts First Current Account Deficit in 17 Months as Dividend Payments Surge 
Australian Shares Fall as Westpac Slides, Miners Gain Ahead of RBA Decision 
ECB Expected to Hold Rates as Middle East Tensions Keep September Hike in Focus 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
BOJ Holds Rates at 1% as Inflation Outlook Eases, October Rate Hike Still Possible 
US Yen Intervention Unlikely to Deliver Lasting Recovery, Yardeni Says 
US Job Growth Seen Picking Up in July 
RBI Holds Repo Rate at 5.25% as Inflation Risks and Global Uncertainty Persist 
Philippine GDP Growth Slows to 2.3% in Q2 
Oil Prices Surge as Iran Hormuz Restrictions Renew Supply Fears 
US Stock Futures Flat as Iran Strait of Hormuz Demands Fuel Oil Concerns 
The Bank of Japan (BOJ) is widely expected to keep its short-term benchmark interest rate at 0.75% following its March 19 policy meeting, marking a pause after its 25 basis point hike last December. While no immediate rate change is anticipated, markets are watching closely for any hawkish signals from policymakers amid persistent inflation pressures and a weakening yen.
Japan's core inflation has recently dipped below the BOJ's 2% annual target, largely due to subdued consumer spending. However, the central bank projects a rebound later in 2026, driven in part by rising global energy prices linked to the ongoing U.S.-Israel conflict with Iran. The yen has come under significant pressure as a result, given Japan's heavy reliance on oil imports — a dynamic that could push the BOJ toward a more aggressive monetary stance to stabilize the currency and contain imported inflation.
On the economic front, Japan delivered a stronger-than-expected fourth quarter in 2025, giving the BOJ greater flexibility to consider future rate increases. That said, uncertainty surrounding spring wage negotiations is keeping the central bank cautious in the near term. Governor Kazuo Ueda recently acknowledged that underlying inflation is trending back toward target on the back of solid wage growth, though he stopped short of reaffirming the BOJ's commitment to continued tightening — possibly reflecting political pressure from Prime Minister Sanae Takaichi's administration to maintain accommodative conditions.
ANZ analysts anticipate a 25 basis point hike in April, with the BOJ expected to signal its readiness to act at this week's meeting. Since exiting ultra-loose monetary policy in early 2024, the BOJ has raised rates by a cumulative 85 basis points. For equities, the Nikkei 225 — up nearly 6% year-to-date — could face headwinds if the central bank adopts an overtly hawkish tone, though any pullback may be cushioned by strength in bank stocks, which tend to benefit from a rising rate environment.
