Japan’s ruling LDP party loses a key election, but PM Shigeru Ishiba vows not to resign, while he’s still negotiating tariffs with Donald Trump. So the yen rose 1%. And New Zealand’s inflation is softer than forecasts.
In part two of our deep dive interview, ANZ Senior Rates Strategist Jack Chambers looks beyond America’s fiscal issues to the UK, Australia and New Zealand.
5 things to know in 5 minutes:
Japan’s ruling Liberal Democratic Party loses its majority in Japan’s upper house, having lost control of the lower house last year. ANZ Senior International Economist Tom Kenny says that makes fiscal control more difficult.
Tom says PM Shigeru Ishiba’s decision not to resign was welcomed because he needs to be there to negotiate a tariff deal with Donald Trump before August 1.
Japan’s Opposition parties have been keen to cut its consumption tax, which was worrying financial markets concerned about Japan’s fiscal deficits and borrowing.
The PM’s decision not to resign saw the yen rise around 1% to 147.3 to the US dollar by 4 am Sydney/Melbourne time. Traders had positioned for a potential resignation, says ANZ FX Strategist Felix Ryan.
A rise in New Zealand’s annual CPI inflation rate to 2.7% in the June quarter from 2.5% in the March quarter was slightly softer than market expectations, which has cleared any roadblocks for the RBNZ to cut next month, says ANZ New Zealand Chief Economist Sharon Zollner.
Cheers,
Bernard.
PS: Catch you tomorrow with detail from the Reserve Bank of Australia’s board minutes from its last meeting, which are due later today.
