Japan has launched a stimulus package that could add almost half a percent to GDP growth. But bond investors aren’t keen on the extra borrowing to pay for it, driving up Japanese Government Bond (JGB) yields to record highs.
In our Deep-Dive interview, ANZ’s Head of FX Research, Mahjabeen Zaman, takes a closer look at where demand is coming from for stablecoins.
5 things to know in 5 minutes:
Japan’s new Prime Minister Sanae Takeuchi has launched a major new stimulus package worth nearly US$135 billion, says ANZ’s Senior International Economist Tom Kenny.
Tom sees the 21.3 trillion yen package helping boost GDP growth by 0.3 to 0.4 percentage points, but without much extra inflation.
ANZ’s Head of FX Research Mahjabeen Zaman says the Bank of Japan (BoJ) is likely to remain cautious about hiking rates, despite the stimulus, which is likely to keep downward pressure on the yen vs the US dollar.
The fiscal stimulus is being noticed by JGB markets though, with yields on the 30-year Treasury near a record-high 3.4%, says ANZ’s Group Chief Economist Richard Yetsenga.
Richard says debate about AI stock valuations will also be closely watched in the week ahead, given global investors are exposed to the valuations of just a few companies, and that US stocks now make up nearly three quarters of the Morgan Stanley Capital Index (MSCI).
Cheers,
Bernard.
Catch you tomorrow with detail from Singapore’s September quarter inflation results, with the annual rate expected to rise to 1.1% from 0.7%, thanks to higher car certificate of entitlement costs.
