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German business confidence shows positive turn
BOJ Governor Kazuo Ueda signaled patience on rate hikes amid yen volatility, while Germany’s Ifo index surprised markets with a rebound, indicating a potential stabilization in German business sentiment
Germany’s Ifo index rises to 86.5, beating forecasts
BOJ’s Ueda signals no rush on rate hikes
German Ifo index rebounds, suggesting temporary stability
In Europe, Germany’s Ifo Business Climate index posted an unexpected gain in October, rising from 85.4 to 86.5 and surpassing the consensus forecast of 85.4. Both the Current Assessment and Expectations indices also increased, moving from 84.4 to 85.7 and from 86.4 to 87.3, respectively, indicating a more optimistic view of Germany’s economic conditions.
Ifo researchers observed, “The German economy stopped the decline for the time being,” suggesting that while risks remain, Germany’s business sentiment shows signs of stabilization after months of downtrend.
BoJ’s Ueda signals no immediate rate hike
Bank of Japan (BOJ) Governor Kazuo Ueda suggested a cautious approach on monetary policy adjustments, stating after the G20 meeting in Washington, “I believe we have enough time” to make a decision. Ueda’s comments imply that the central bank is unlikely to introduce a rate hike at its forthcoming policy meeting, as economic uncertainty looms.
Ueda underscored the importance of considering Japan’s economic landscape, particularly the pressures of a weaker yen and the global uncertainties surrounding the U.S. economy, which may face further unpredictability with the upcoming U.S. presidential election. The BOJ remains vigilant but measured, maintaining a wait-and-see stance as it evaluates these external pressures.
Separately, Japan’s Finance Minister Katsunobu Kato reiterated concerns regarding the yen’s heightened volatility. Kato noted the need for close monitoring of foreign exchange movements, signaling the government’s readiness to intervene if fluctuations become destabilizing.
Recent data shows a slight decline in Tokyo’s core Consumer Price Index (CPI), excluding food prices, from 2.0% year-over-year (YoY) to 1.8% YoY in October. This outcome slightly beat market expectations of 1.7% and marks the first time in five months that inflation has fallen below the BOJ’s 2% target. The headline CPI also eased, falling from 2.1% YoY to 1.8% YoY, signaling some relief in inflationary pressures.
