Bank of Japan Signals Caution, Slows Bond Taper While Holding Rates

Economic

Summary:

The Bank of Japan (BOJ) left interest rates unchanged at 0.5% on Tuesday and outlined a slower path for reducing its bond purchases beginning in fiscal 2026...

BOJ Holds Steady, Prioritizes Stability Over Aggression

At the conclusion of its two-day policy meeting, the BOJ confirmed expectations by maintaining its short-term interest rate at 0.5%, reaffirming its gradual approach to tightening monetary policy. The central bank also announced that it will slow its bond tapering process from April 2026 onward, aiming to reduce monthly bond purchases by 200 billion yen per quarter. By March 2027, total monthly purchases are projected to decline to approximately 2 trillion yen.

This decision leaves the current tapering plan in place through March 2026, suggesting that any aggressive rollback of stimulus is off the table for now.

Gradual Normalization Amid Global and Domestic Pressure

The BOJ's cautious approach highlights its concerns over both external risks—such as Middle East tensions and U.S. tariff actions—and domestic uncertainties like wage growth and inflation trends. While Japan has seen inflation hover just above the 2% target, Governor Kazuo Ueda has signaled the need for stability before initiating any substantial tightening.

The Japanese bond market has experienced volatility, particularly in ultra-long government bonds (JGBs), prompting the central bank to ease the pace of normalization to avoid destabilizing the market. By carefully phasing its taper over multiple fiscal years, the BOJ appears focused on protecting bond yields from sudden spikes, which could impair fiscal sustainability and investor confidence.

Market Reaction and Outlook

Markets reacted moderately to the announcement. The 10-year JGB yield inched up to 1.465%, while the yen remained flat at 144.80 per dollar, indicating limited surprise. Investors now await Governor Ueda's 3:30 p.m. (0630 GMT) press conference, where further guidance may be offered on future rate hikes or taper adjustments.

Overall, the BOJ continues to strike a delicate balance: acknowledging inflationary pressure without undermining financial market stability or derailing Japan’s still-fragile economic recovery. Further moves, particularly any interest rate increases, are likely to hinge on geopolitical developments, wage trajectories, and global central bank trends.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Bangkok Races Against Time as Tariff Moratorium Nears Expiry

In a move to prevent a potentially damaging tariff increase, Thailand announced it will submit a formal trade proposal to the United States within the week. The country faces the risk of a 36% tariff on its exports if the current moratorium, which shields Thai products from punitive duties, is not successfully renegotiated before its July expiration.

Finance Minister Pichai Chunhavajira stated on Tuesday that technical-level discussions will begin online this week, with the formal proposal aligned with pre-announced trade criteria. These include addressing trade imbalances, enhancing U.S. market access, and preventing transshipment violations, while also encouraging Thai investment projects that generate employment in the U.S..

Digital Diplomacy to Lead the Way

According to Pichai, the first phase of negotiation will be conducted virtually, and any face-to-face meetings will be considered based on progress in the preliminary rounds. This approach underlines the urgency of maintaining diplomatic momentum while navigating logistical challenges.

Thailand’s earlier informal proposal, submitted in May, emphasized collaborative economic measures that benefit both sides. The formal version, to be submitted after this week’s talks, is expected to provide more concrete commitments to rebalance bilateral trade and support U.S. economic interests.

Strategic Context: U.S. Trade Pressure and Thai Economic Priorities

This development comes amid broader U.S. efforts to tighten trade rules and enforcement, particularly in Southeast Asia, to combat transshipment and protect domestic industries. Thailand, a significant exporter of electronics, automotive parts, and apparel, could suffer substantial economic setbacks if subjected to steep tariffs.

For Bangkok, avoiding the tariff is not only an economic imperative but a geopolitical one, as it seeks to remain a stable U.S. trade partner while balancing its ties with regional giants like China. The Thai government is also under domestic pressure to maintain export competitiveness and economic stability amid global uncertainty.

With the July deadline approaching fast, the success of these talks may depend on how convincingly Thailand can demonstrate compliance, reciprocity, and economic alignment with U.S. trade priorities.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Policy Hold Signals Caution in Unpredictable Climate

At its June 2025 meeting, the Bank of Japan (BOJ) voted unanimously to leave short-term interest rates at 0.5%, aligning with expectations but reinforcing a notably cautious stance in the face of complex global headwinds. Despite persistent inflation and calls for normalization, the BOJ opted to maintain its gradual and calculated approach — announcing it will slow the pace of its quantitative tightening (QT) in fiscal year 2026 rather than aggressively unwind its decade-long stimulus program.

This move comes as Japan grapples with a fragile domestic bond market, international trade disruptions from fresh U.S. tariffs, and heightened geopolitical tension following escalations in the Middle East. The BOJ's balance sheet remains near the size of Japan’s entire economy, highlighting the risks of an abrupt policy pivot.

Investor Reaction: Measured and Watchful

The initial market response was largely subdued. The 10-year JGB yield rose modestly by 1.5 basis points to 1.465%, while the yen traded flat at around 144.80/USD. Analysts generally interpreted the BOJ’s tone as one of caution, aimed at preserving market stability without prematurely tightening financial conditions.

Strategists such as Norihiro Yamaguchi of Oxford Economics stressed that the BOJ’s hesitation to hasten bond reduction reflects sensitivity to volatility in super-long-term Japanese government bonds, which if left unchecked, could spill into shorter durations and disrupt broader economic momentum.

Similarly, Fukuoka Financial Group’s Tohrū Sasaki suggested that uncertainties related to global tariffs and Middle East conflicts have given the BOJ a convenient rationale to delay further tightening, likely pushing any rate hike beyond 2025.

Yield Curve and Inflation Dynamics Still Under Watch

Despite the cautious tone, the central bank is not entirely passive. Miki Den from SMBC Nikko noted the BOJ’s subtle shift — reducing bond purchases for maturities under 10 years while maintaining support for longer maturities, hinting at an intention to gradually let market forces play a greater role in price discovery.

Khoon Goh of ANZ echoed the inflation concerns, noting that the yen’s weakness and rising oil prices, especially under the current geopolitical strain, will likely continue to pressure Japan’s import-reliant economy. This could complicate the BOJ’s stance if cost-push inflation persists and real wages stagnate.

However, many observers, including Nomura’s Kota Suzuki and Sumitomo Mitsui Trust’s Katsutoshi Inadome, believe the BOJ remains effectively paralyzed in the near term — unable to raise rates due to global and domestic uncertainties, yet hesitant to inject further liquidity unless absolutely necessary.

Strategic Outlook: A Predictable Exit, Not a Hawkish Pivot

With the quarterly bond-buying pace of 400 billion yen remaining until April, the BOJ reaffirmed its long-term plan to exit ultra-loose policies steadily. This strategy appears consistent with Governor Kazuo Ueda’s intent to hand control back to market participants while carefully monitoring any signs of destabilization in rates or inflation expectations.

In the context of a potentially prolonged Middle East conflict, uncertain trade policies from the U.S., and structural weaknesses in Japan’s labor market, most analysts now push back expectations for another BOJ rate hike to October at the earliest — if at all in 2025.

Ultimately, the BOJ’s decision reflects a broader pattern among major central banks: one of tempered policy normalization under the shadow of global shocks. While Japan’s inflation remains above target, the BOJ seems determined not to let domestic tightening spark broader financial distress — a delicate balance that will define its credibility in the months ahead.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Cryptocurrency

A Milestone for U.S. Crypto Legislation — But Not Without Political Friction

On Tuesday, the Senate is expected to approve the GENIUS Act — short for Guiding and Establishing National Innovation for U.S. Stablecoins — marking the most significant move yet toward formal crypto regulation in the U.S. The legislation, focused on establishing a framework for consumer protections and market guardrails for stablecoins, received bipartisan support but not without controversy.

Although 18 Senate Democrats crossed party lines to support the bill alongside the Republican majority, a large portion of the Democratic caucus expressed deep reservations. Chief among them is the bill’s omission of any restrictions on presidential holdings in crypto-related ventures, which critics argue leaves the door wide open for personal profiteering — particularly by President Donald Trump.

Trump’s Crypto Empire Raises Ethics Flags

At the center of the criticism is Trump’s financial involvement in World Liberty Financial, a company tied to a newly launched stablecoin (USD1) and other crypto ventures. Trump’s family reportedly holds significant equity in the project, which has garnered attention following a private fundraising dinner hosted by Trump himself. These ventures coincide with Trump’s policy support for rapid crypto integration into the U.S. economy.

While the GENIUS Act prohibits members of Congress and their families from profiting off stablecoin investments, that clause does not apply to the president or their relatives, a detail drawing condemnation from key Democrats. Senator Elizabeth Warren, one of the bill’s most vocal opponents, described it as a “super highway for Trump corruption,” warning that it opens the floodgates for political enrichment under the guise of market regulation.

Crypto Industry Sees Bipartisan Victory Amid Ethical Storm

Despite the political tension, major crypto players — including Coinbase CEO Brian Armstrong — have hailed the bill as a victory for innovation and legitimacy. Armstrong has met with Trump directly and voiced support for the administration’s openness to digital assets. Coinbase even co-sponsored a recent Army anniversary parade in Washington, coinciding with Trump’s birthday and further intertwining crypto influence with political branding.

The Treasury Department also supports the bill’s economic potential. Treasury Secretary Scott Bessent recently projected that clear regulatory pathways could propel the stablecoin market past $2 trillion by 2028, a forecast that fuels investor enthusiasm even as watchdogs call for tighter governance.

Legislative Outlook: More Challenges Ahead

Though Tuesday’s vote is expected to clear the Senate with a simple majority, the road to enactment remains complex. The Republican-led House must now review the bill, where lawmakers may attach broader market structure provisions. If that happens, the revised bill could face new hurdles back in the Senate.

Nevertheless, Trump has publicly pushed for final legislation on his desk before the August congressional recess, indicating that crypto remains a key priority for his administration — both politically and economically.

Regulation or Opportunity?

While the GENIUS Act is hailed as a foundational step for the digital asset economy, the broader implications of presidential financial entanglement in emerging sectors like crypto remain unresolved. For critics, the bill sets a dangerous precedent of selective ethics. For supporters, it signals America’s belated but essential embrace of blockchain-based finance.

As the House prepares to deliberate, the next round of negotiations will determine whether the bill stays a narrowly targeted crypto framework — or becomes the opening act in a larger battle over political integrity and digital economic sovereignty.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Middle East Situation

Political

Trump's Abrupt Departure Fuels Speculation of U.S. Military Posture Shift

U.S. President Donald Trump left the G-7 Summit in Canada ahead of schedule, citing urgent national security concerns tied to the deepening conflict between Israel and Iran. The announcement came shortly after he publicly urged the evacuation of Tehran, Iran’s capital, and warned that the Islamic Republic must abandon its nuclear ambitions or face grave consequences.

This rapid departure triggered widespread speculation that the U.S. might be preparing more direct involvement in support of Israel, although White House officials denied that American troops would participate in any offensive actions. Trump, however, reiterated a firm red line: “IRAN CAN NOT HAVE A NUCLEAR WEAPON.”

Escalation on the Ground: Death Toll Rises

Since Friday, the exchange of missiles and drone attacks between the two regional powers has intensified. Israeli strikes have damaged Iranian infrastructure, including a hit on the state-television headquarters during a live broadcast. Tehran has retaliated with several waves of drone and missile fire. Iranian reports confirmed 224 deaths, mostly civilians, while Israeli sources reported 24 fatalities and nearly 600 injuries.

The escalating death toll has provoked both diplomatic condemnation and political division. Iran’s President Masoud Pezeshkian emphasized proportional retaliation in a call with Turkish President Erdoğan, stating, “We do not seek to escalate the conflict, but we will respond to any attack on Iranian soil in a manner that will make them regret it.”

Diplomacy Hangs by a Thread Amid Continued Attacks

Despite ongoing strikes, diplomatic overtures persist. The Wall Street Journal and Reuters reported that Iran is open to resuming nuclear negotiations with the U.S., contingent upon Washington not joining Israel's offensive. These communications were reportedly channeled through mediators in Qatar, Saudi Arabia, and Oman. French President Emmanuel Macron suggested that Trump’s early exit might signal a behind-the-scenes push for a ceasefire.

Still, Israeli Prime Minister Benjamin Netanyahu signaled no intention to de-escalate without results. “We gave it a chance for 60 days,” he said, referencing a negotiation window that preceded Israel’s military action. Netanyahu further hinted that high-value Iranian leadership targets, including Supreme Leader Ayatollah Khamenei, are not off the table.

Domestic and Market Reactions: Divided Congress and Jittery Markets

Back in Washington, bipartisan voices in Congress—Kentucky Republican Thomas Massie and California Democrat Ro Khanna—are preparing a resolution to block U.S. military involvement, though its timing is uncertain due to congressional recess.

Financial markets showed immediate sensitivity. The S&P 500 futures dipped 0.6%, while oil prices jumped nearly 2% amid supply disruption fears. Brent crude briefly dropped on hopes of resumed nuclear talks, but volatility remains high. U.S. Treasuries and European bonds rallied as investors sought safety in fixed-income assets.

Prolonged Risk or Pivot to Peace?

Israel claims its military operation is “ahead of schedule” and focused on dismantling Iran’s missile and nuclear capacities. Strategic Affairs Minister Ron Dermer emphasized that any diplomatic shift must originate from Tehran. Meanwhile, global leaders remain in a state of watchful uncertainty, as the risk of a wider regional war looms large.

If the U.S. remains militarily uninvolved but diplomatically assertive, a fragile window for de-escalation may open. However, as Netanyahu's rhetoric grows sharper and Tehran doubles down on retaliation, the road to peace appears increasingly narrow—leaving the world to monitor every move, tweet, and explosion for clues about what comes next.

Source: Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Aerospace and Autos Get Tariff Relief

At the G7 Summit in Canada, U.S. President Donald Trump and U.K. Prime Minister Keir Starmer unveiled a trade pact that eliminates U.S. tariffs on British aerospace exports and secures a lower 10% tariff on up to 100,000 British vehicles annually. This preferential treatment provides a significant cost advantage over the 25% tariff applied to other countries and is seen as a direct win for U.K. manufacturing sectors seeking post-Brexit access to key global markets.

The agreement also expands mutual market access for beef and ethanol, while confirming reciprocal quotas for U.S. beef exports—though they must meet the U.K.'s stringent food safety standards. U.K. Trade Secretary Jonathan Reynolds highlighted the speed of execution, noting that this "first set of agreements" was finalized within weeks.

Steel and Aluminum: The Deal’s Unfinished Business

Despite the celebratory tone, the agreement leaves unresolved the most contentious issue: steel and aluminum tariffs. While the U.K. has temporarily avoided the 25–50% tariffs imposed earlier this month on other countries, that exemption is conditional and set to expire July 9 unless a secure quota mechanism is established.

According to the White House executive order, Commerce Secretary Howard Lutnick will determine quota levels, which would shield a limited volume of U.K. steel and aluminum from steep tariffs—but only if Britain demonstrates adequate safeguards on its production facilities and supply chains.

Strategic Language, Symbolic Strength

The political symbolism of the deal was clear. Starmer called the agreement “a real sign of strength,” while Trump’s off-the-cuff comment—“The U.K. is very well protected. You know why? Because I like them”—suggested a personal dimension to trade diplomacy. This emphasis on bilateral friendship stands in contrast to rising U.S. trade tensions with other global partners, including the EU and China.

Notably, the agreement does not yet address key sectors like pharmaceuticals or advanced manufacturing. Both governments confirmed that further negotiations will aim to secure “significantly preferential outcomes” for U.K. pharma and protect both sides from fallout from Section 232 national security-based tariff investigations currently underway in Washington.

The agreement is not yet a full free trade agreement but represents what analysts consider a “framework of trust.” Implementation will begin seven days after publication in the Federal Register, but broader negotiations are expected to continue well into the year.

While this deal delivers immediate wins for U.K. aerospace and auto sectors, the lack of resolution on steel tariffs and limited sector coverage suggest that a comprehensive trade accord remains distant. Still, the agreement signals that the U.S. and U.K. are intent on deepening economic ties amid an increasingly fragmented global trade environment. The next test will be whether the two sides can find common ground on industrial protections and regulatory alignment in a post-tariff world.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Commodity

Middle East Situation

Geopolitical Anxiety Fuels Renewed Gold Demand

Gold rose as much as 0.4% in early Asian trading, reaching above $3,400 per ounce after a sharp 1.4% pullback on Monday—its steepest daily loss in a month. The rebound was driven by renewed geopolitical anxiety following President Trump’s urgent call for evacuation from Tehran, which underscored the risk of a broader Middle East conflict.

The warning, issued via social media, came shortly after Trump reiterated that Iran should have signed a nuclear agreement prior to Israel’s recent strikes. Markets interpreted the message as a sign of deepening instability, prompting renewed haven demand across global financial centers.

Ongoing Conflict and Economic Fears Sustain Rally

Despite the brief correction on Monday, gold remains on track for its sixth consecutive monthly gain—the strongest such rally in over 20 years. This resilience reflects not only military conflict fears but also broader macroeconomic unease. The ongoing surge has been supported by global uncertainty surrounding Trump's aggressive tariff strategy, heightened inflation concerns, and fears of weaker global growth.

Gold gained nearly 4% last week as Israel escalated its campaign against Iran’s nuclear infrastructure. The possibility of prolonged conflict across a region central to global energy supply has made precious metals a favored hedge for institutional and retail investors alike.

Long-Term Outlook Bolstered by Political Uncertainty

Jeffrey Gundlach, CEO of DoubleLine Capital, recently noted that gold is "no longer for lunatic survivalists," emphasizing that bullion has become a mainstream financial safe haven amid policy shocks and geopolitical risks. With prices now only $100 away from the all-time high reached in April, sentiment remains bullish as both fundamental and technical factors align in gold’s favor.

Spot gold traded at $3,395.46 an ounce, while the Bloomberg Dollar Spot Index remained flat—suggesting that gold’s gains were driven more by geopolitical than currency-driven dynamics. Silver edged higher, while platinum remained stable and palladium saw a minor decline.

Gold’s swift recovery from Monday’s dip signals the market’s sensitivity to conflict headlines and policy unpredictability. As long as the Israel-Iran situation remains unresolved and global trade tensions simmer, the precious metal is likely to stay elevated—offering a reliable refuge amid mounting global risks.