Archive

March 19, 2025
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Japan: Policy Rate Held At 0.5% (Consensus 0.5%) in Mar-25

  • The Bank of Japan held its uncollateralised overnight call rate at around 0.5%, in line with expectations, reflecting a moderate economic recovery and sustained inflationary pressures.
  • Core CPI inflation remains at 3.0-3.5% year-on-year, with underlying inflation expected to gradually rise towards the BoJ’s target by 2025, driven by a tightening labour market and wage-price dynamics.
  • The BoJ remains data-dependent, with policy direction contingent on wage growth sustainability, yen depreciation effects, and global economic risks, suggesting a cautious approach to normalisation.
March 19, 2025
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Indonesia: Policy Rate Held At 5.75% (Consensus 5.75%) in Mar-25

  • Bank Indonesia held the BI-Rate at 5.75%, consistent with market expectations, as inflation remains subdued and global uncertainty persists.
  • The trade surplus and strong foreign exchange reserves provide resilience, though capital flows remain volatile amid shifting global risk sentiment.
  • The central bank maintains a cautious easing bias, with future rate adjustments contingent on inflation trends, Rupiah stability, and global financial market conditions.
March 19, 2025
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US: Policy Rate Held At 4.5% (Consensus 4.5%) in Mar-25

  • The Federal Reserve held the federal funds rate at 4.25%-4.50%, consistent with expectations, citing increased economic uncertainty and persistent inflation risks.
  • Core PCE inflation was revised up to 2.8% for 2025, signalling ongoing inflationary pressures, while GDP growth was downgraded to 1.7%, indicating stagflationary economic forces.
  • The Fed will slow balance sheet reduction from April, reflecting concerns over liquidity and financial conditions, while future rate decisions remain data-dependent.
March 12, 2025
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Canada: 25bp Rate Cut To 2.75% (Consensus 2.75%) in Mar-25

  • The Bank of Canada cut the policy rate by 25 basis points to 2.75%, in line with expectations, as heightened US trade tensions introduced downside risks to economic activity despite stronger-than-anticipated GDP growth.
  • Inflation remains near the 2% target but is expected to rise to 2.5% in March due to the expiry of temporary tax measures, while concerns over tariffs have lifted short-term inflation expectations.
  • The Bank will closely assess the balance between weaker demand and higher cost pressures, maintaining a data-dependent approach to future rate decisions, with inflation expectations and trade policy developments being key determinants.

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