The move followed press reports on an imminent move and comments from BOJ governor Kazuo Ueda and a colleague, who said inflation was sustainably moving up toward the 2% target. Reinforcing that view, Japan’s largest trade union group Rengo said average wage rise demands hit 5.85% for this year – topping 5% for the first time in 30 years.
In China, surprisingly upbeat trade numbers for the first two months of the year did little to lift stocks there, with markets still puzzling over just what level of government stimulus may be in the works after this week’s annual government plans were unveiled. China’s CSI300 lost 0.6%.
And in Europe, much like Powell and his Fed colleagues, the ECB is set to leave rates on hold at its March meeting on Thursday – likely re-emphasizing patience in getting inflation back down to its 2% target even as the regional economy flatlines.
Remarkably, given the recent gulf in economic performance between the United States and euro zone, market expectations for ECB easing are identical to those of the Fed – with both central banks odds on to deliver their first cuts in June this year and roughly 90 basis points of cuts each seen this year.
The euro, euro zone stocks and government bond prices were all a touch firmer ahead of the decision.
Back stateside, Powell reprises his congressional testimony to the Senate Banking Committee later on Thursday – possibly offering more clues to Fed thinking in the question-and-answer session that follows.
He revealed little new on Fed thinking in Wednesday’s appearance, merely restating hopes that rates would be lowered later this year but saying the still-strong economy allowed the Fed more time to assess data on whether inflation was durably licked.
Some labor market softening in the latest soundings from private sector surveys and job openings data helped give his words a dovish tilt. Ten-year Treasury yields fell to their lowest in a month, just above 4%, and held that move on Thursday. Wall St stocks regained much of the prior day’s shakeout in mega-caps and were steady ahead of today’s bell.
