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October 30, 2025
JP.png

BOJ Holds: Caution Amid Uncertainty

  • The BOJ held rates at 0.5% as expected, with a 7-2 vote showing continued division. A December hike is now priced at 50-55%, down from 68% pre-Takaichi.
  • Inflation forecasts are unchanged at 2.7% (FY25), 1.8% (FY26), with sluggish underlying price growth and downside economic risks delaying tightening.
  • Wage sustainability and trade policy uncertainty dominate the outlook. 2026 labour talks and corporate profit trends will determine the rate path timing.
October 29, 2025
CA.png

BoC Cuts to 2.25%: End or Pause?

  • The Bank of Canada cut its policy rate by 25bp to 2.25%, matching the consensus, and signals the current rate is about right to sustain 2% inflation.
  • Structural damage from tariffs limits further monetary easing. Fiscal policy is expected to carry the economic support burden ahead.
  • Economists are divided: some see the cycle complete at 2.25%, others forecast further cuts to 1.75-2.0% if growth disappoints materially.

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