BOJ Raises Rates, Encouraged By Resilient Business And Wage Growth

Samantha Luan

Forex

Political

Economic

Summary:

Following a two-day board meeting, the central bank announced that it will bump up its policy rate, an uncollateralized overnight call rate, by 25 basis points to 0.75%. This will be the BOJ's fourth interest rate increase since it exited from negative rates in March 2024.

The Bank of Japan on Friday went ahead with the interest rate increase it had been foreshadowing, its first such move in 11 months and one that was made easier by wage growth momentum and receding uncertainty surrounding the impact of U.S. tariffs.

The bank last hiked rates in January but then put its normalization cycle on pause due to U.S. President Donald Trump's tariff onslaught. Since then, Tokyo and Washington have reached a deal on tariffs, easing anxiety over policy uncertainty.

Board members have been laying the groundwork for a hike. Earlier this month, Gov. Kazuo Ueda hinted that an increase was on the table. At the BOJ's last meeting in October, two of the nine board members suggested a rate increase.

The BOJ's latest Tankan survey, released on Monday, reflected improving business sentiment among large manufacturers, in part thanks to the weak yen.

BOJ Raises Rates, Encouraged By Resilient Business And Wage Growth_1

Wage-growth momentum has been another key measure Ueda has focused on. Positive signs in nominal wage growth -- major unions are preparing to demand a pay raise next fiscal year -- and a tight labor market supported the BOJ's decision to hike rates.

The market largely predicted the BOJ would move ahead with an increase. Data from Totan Research and Totan ICAP as of Thursday put the implied probability of a December rate hike at 97%.

The BOJ's decision comes after the U.S. Federal Reserve last week lowered interest rates for the third time this year.

All eyes are now on BOJ chief Ueda's press conference this afternoon. Market watchers will pay close attention to any comments that might indicate whether the board feels the terminally weak yen calls for the bank to speed up its rate hike cycle.

Source: Asia_Nikkei

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[Quick Facts]

1. Gaza Ceasefire mediators to meet in U.S. for the second phase negotiation.

2. U.S. November inflation cools but faces skepticism.

3. ECB officials say rate-cut cycle may have ended.

4. Bank of England cuts rates by 25 bps, pace of easing to slow.

5. Trump: Next Fed Chair must be "Uber Dovish".

6. ECB holds rates steady, raises inflation forecasts.

7. Goolsbee: CPI data opens door to "more rate cuts" next year.

[News Details]

Gaza Ceasefire mediators to meet in U.S. for the second phase negotiation

On December 18th, local time, White House officials announced that U.S. Special Envoy for Middle East Affairs Witkoff will meet in Miami on December 19 with senior officials from Qatar, Egypt, and Turkey, focusing on the second phase of the Gaza ceasefire. Sources say Qatar, Egypt, Turkey, and the U.S. believe both Israel and Hamas are stalling implementation of the second phase of the truce, prompting urgent efforts to draft a joint plan to push both sides to honor commitments.

U.S. November inflation cools but faces skepticism

The U.S. Bureau of Labor Statistics (BLS) reported that headline CPI rose 2.7% year-on-year last month, while core CPI—excluding volatile food and energy prices—was even lower at 2.6%, both below economists' expectations. Ahead of the release, Dow Jones survey economists had forecast headline CPI at 3.1% and core CPI at 3%. The unexpectedly low November CPI breaks the recent trend of persistent inflation strength. Several economists noted that shelter prices, one of the largest components of CPI, were essentially flat over two months, casting doubt on the data's authenticity.

Ashworth, an economist at Capital Economics, pointed out that while the data might reflect a genuine retreat in inflation pressures, such a sudden stall—especially in more persistent service items like rents—is highly unusual, especially outside a recession. He concluded that it may take December's data to determine whether this is a statistical anomaly or true disinflation.

Morgan Stanley economist Gapen said in a report that the surprise drop reflects weakness in goods and services markets, but part of the cause could be methodological issues: BLS may have carried forward past price data for some categories, effectively assuming zero inflation. He believes November's data is too volatile to draw firm conclusions about inflation trends.

ECB officials say rate-cut cycle may have ended

The European Central Bank held rates steady for the fourth consecutive meeting, keeping the deposit facility rate at 2%, and reiterated that inflation will return to its 2% medium-term target. According to sources cited by foreign media, based on the latest growth and inflation outlooks, ECB officials see the rate-cut cycle as very likely over unless another major shock occurs.

An ECB source said that after eight rate cuts starting from a peak of 4%, the deposit rate should remain at 2% barring major shocks.

While interest rate futures markets scaled back bets on ECB cuts and priced in possible hikes as early as next year, the source said any talk of hikes is premature. One policymaker noted that if inflation stays below target for several months, further monetary easing remains possible.

Bank of England cuts rates by 25 bps, pace of easing to slow

The Bank of England cut its policy rate by 0.25 percentage points to 3.75% on Thursday, matching market expectations and marking the lowest level since February 2023. The decision was passed by a 5–4 vote; members Greene, Lombardelli, Mann, and Pill favored holding rates unchanged.

The BoE said future decisions on further monetary easing will become harder, and rates are likely to continue a gradual downward path. Members lowered inflation forecasts and now expect zero GDP growth in Q4, versus the previous forecast of +0.3%.

BoE Governor Bailey switched his vote to support the cut. He noted that rates are on a gradual downward track, and each cut makes the decision harder, but disinflation has become more firmly established, leaving room for easing. Looking ahead, he believes the BoE will stay on a gradually declining path toward a level that can sustain stable inflation—neither overheating nor undercooling. Mathematically, the bank is approaching that equilibrium, so rate decisions will become more finely balanced. He expects the pace of cuts to slow at some point, but cannot specify when due to high uncertainty.

Trump: Next Fed Chair must be "Uber Dovish"

On Wednesday, U.S. President Trump stated clearly in a national address that the next Fed chair must be someone who supports large rate cuts, and promised to announce the key decision soon. Last week, Trump told The Wall Street Journal he prefers former Fed Governor Kevin Warsh or White House economic adviser Kevin Hassett for the role. He also made clear the next Fed chair should consult him on setting interest rates, breaking with the tradition of presidential non-interference in rate decisions.

ECB holds rates steady, raises inflation forecasts

On Thursday, December 18th, the ECB kept its deposit facility rate unchanged at 2%, as expected, marking four consecutive meetings without change. Main refinancing rate and marginal lending rate remained at 2.15% and 2.40%. The latest assessment reaffirmed that inflation is expected to stabilize at the 2% target over the medium term.

Euro-system staff projections show headline inflation averaging 2.1% in 2025, 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. Core inflation is seen at 2.4% in 2025, 2.2% in 2026, 1.9% in 2027, and 2.0% in 2028. The 2026 inflation forecast was revised upward mainly because staff now expect a slower decline in services inflation than previously thought.

Growth prospects are stronger than September forecasts, driven especially by domestic demand. Growth forecasts were raised to 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and maintained at 1.4% in 2028.

The Governing Council remains firmly committed to ensuring inflation stabilizes at 2% over the medium term. Monetary policy stance will be decided meeting-by-meeting based on data, assessing inflation outlook and risks, taking into account the latest economic and financial data, developments in underlying inflation, and transmission of monetary policy. The Council will not pre-commit to any specific rate path.

Goolsbee: CPI data opens door to "more rate cuts" next year

Federal Reserve Bank of ‌Chicago President Austan Goolsbee said on ‌Thursday, "there's a lot to like" in the latest consumer price index data, and if it can be sustained, it will help open the door for more interest rate cuts ‍next year. "My view is that the settling point of rates is a fair bit below where it is today, and that by the end ⁠of next year we can, as long as we are hitting our marks on getting inflation back on path to 2%, I think that it's realistic that rates can come down a fair amount," he said.

Goolsbee also explained, "I just am uncomfortable front loading the rate cuts. Before there's strong confidence inflation will be returned to target. Before easing again."

The report, its release delayed by the government shutdown, showed a moderation in price pressures. But economists viewed the report cautiously given issues with its compilation, and the favorable turn was not seen as an all-clear that price pressures.

[Today's Focus]

UTC+8 11:00 Bank of Japan December interest rate decision

UTC+8 14:30 BOJ Governor Ueda Kazuo holds monetary policy press conference

UTC+8 15:00 Germany November PPI

UTC+8 16:00 ECB Governing Council member Wunsch speaks

UTC+8 17:00 ECB Governing Council member Kocher speaks

UTC+8 17:00 ECB Governing Council member Lane speaks

UTC+8 21:30 Canada October retail sales month-on-month

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Gerik

Economic

Forex

Yen Nears 10-Month Low as Markets Brace for BOJ Messaging

In Friday’s early Asia trading, the yen held steady near recent lows, with the dollar-yen exchange rate at 155.59 hovering close to its November trough of 157.90. The currency's subdued performance reflects skepticism over whether the Bank of Japan can maintain a consistent rate-hiking path, despite widespread expectations for a 25-basis-point increase later in the day.

This would lift Japan’s short-term interest rate to 0.75%, its highest level in three decades, marking another step in the country’s departure from ultra-loose monetary policy. Yet, traders appear unconvinced that the BOJ will be able to continue hiking rates without triggering further volatility or undermining economic growth.

Ueda’s Press Conference Holds the Key

Market attention is firmly focused on BOJ Governor Kazuo Ueda’s post-decision press conference, which is expected to clarify the central bank’s stance on future rate moves. Reuters sources confirmed that the BOJ will not release updated estimates of the neutral interest rate, placing even more weight on Ueda’s verbal guidance.

Strategists such as Yuxuan Tang from J.P. Morgan Private Bank believe the rate hike is already priced in and see limited potential for a yen rally unless Ueda strikes a more hawkish tone than anticipated. A signal that the next rate hike is still far off could cap any bullish sentiment around the yen, reinforcing its status as a funding currency.

However, any surprise hold however unlikely would likely trigger a sharp yen sell-off, potentially forcing Japanese authorities to consider intervention to restore confidence. In this scenario, the credibility of the BOJ’s normalization strategy could come under immediate market scrutiny.

Dollar Volatility Driven by U.S. Inflation and Shutdown Disruptions

The broader dollar index saw some fluctuation following a surprising drop in U.S. inflation, but traders questioned the validity of the data due to collection gaps from the recent government shutdown. As a result, the initial decline in the dollar reversed, and the currency stabilized across most major pairs.

Despite the inflation surprise, the Federal Reserve's future rate path remains unclear, as investors are hesitant to draw firm conclusions from a potentially flawed CPI report. This has led to muted moves across FX markets, with the yen remaining one of the few currencies poised for policy-induced movement.

Sterling and Euro Respond to Central Bank Divergences

Elsewhere, the Bank of England's interest rate cut to 3.75% was largely anticipated, but the decision was more closely contested than markets expected, leading to a brief round-trip in sterling, which settled at $1.3392. The tighter vote suggests future rate cuts could be less certain, keeping the pound relatively stable.

Meanwhile, the euro slipped modestly to $1.1724 after ECB President Christine Lagarde provided no forward guidance. Her comments pushed back against hawkish voices within the central bank, highlighting a lack of consensus over whether the next move should be a rate hike.

This cautious tone from the ECB contrasts with earlier hawkish signals, particularly from Executive Board Member Isabel Schnabel, who had hinted at further tightening. The divergence in views has injected ambiguity into the euro's outlook, weakening its position relative to the dollar.

Minor Movements in Other Majors Reflect Cautious Sentiment

Currency movements outside of the major policy centers remained subdued. The Norwegian krone strengthened slightly after the Norges Bank kept rates steady at 4% but indicated no urgency to cut. The Swedish krona showed minimal reaction to an expected hold. Meanwhile, the Australian and New Zealand dollars were broadly unchanged, reflecting stable risk sentiment in the region.

In Asia, the offshore Chinese yuan firmed to a 15-month high of 7.031 per dollar, buoyed by improving sentiment around Beijing’s macro policy stance. Conversely, South Korea’s won remained under pressure, trading at 1477 per dollar amid persistent selling interest.

Fragile Yen Caught Between Policy Credibility and Global Caution

As the BOJ prepares to deliver its third rate hike under Governor Ueda, the yen finds itself in a precarious position. While higher rates theoretically support currency strength, Japan’s broader fiscal concerns and doubts about the BOJ’s commitment to sustained tightening weigh heavily on market sentiment.

Without a clear roadmap for future hikes, Ueda’s messaging will determine whether the yen can regain stability or slide deeper into weakness. In a landscape of diverging global monetary policies and volatile economic signals, the BOJ’s next steps may shape not just the yen, but also broader sentiment across currency markets in the months ahead.

Source: Reuters

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Economic

A Historic Pivot in Japan’s Monetary Policy

On Friday, the Bank of Japan is set to raise its short-term interest rate to 0.75% from 0.5%, marking its highest policy rate since 1995. This would be the BOJ’s third rate hike since exiting its ultra-loose monetary regime in 2023 and represents a significant milestone in Governor Kazuo Ueda’s gradual efforts to normalize policy in an economy long dominated by deflation and stagnant wages.

The decision comes at the conclusion of the BOJ’s two-day policy meeting and is widely anticipated by markets, with 90% of economists in a Reuters poll forecasting the rate move. This trajectory aligns with the central bank’s growing confidence that Japan is achieving its 2% inflation target on a more sustainable basis.

While a 0.75% rate is still low by international standards, it marks a turning point for Japan, which was the last major economy to exit negative interest rates. Importantly, this move reflects the BOJ’s belief that recent wage growth trends and persistent core inflation 3% in November will support long-term price stability.

Inflation Anchored Above Target and Wages Strengthen

One of the key drivers behind the BOJ’s anticipated rate hike is the resilience of inflation. Core CPI rose to 3% in November, remaining above the central bank’s 2% target for nearly four years. This persistence has been partly attributed to high food prices and import costs, but also reflects improving domestic wage conditions.

Central bank surveys indicate that Japanese businesses are showing increased confidence and are expected to continue raising wages in 2026. This development supports the BOJ’s long-standing condition for policy tightening: sustained wage growth that reinforces inflation expectations.

The central bank is also responding to the risk of falling behind the inflation curve. Several BOJ board members have signaled their willingness to tighten further in order to prevent entrenched inflation and to solidify the credibility of the central bank’s inflation target.

Ueda's Balancing Act: Hike Now, Caution Later

Although the rate hike itself is largely expected, markets are closely watching Governor Ueda’s post-meeting press conference for forward guidance. Analysts anticipate that Ueda will reinforce the message that Japan’s real interest rates will remain accommodative even after this hike, and that further normalization is likely.

However, the BOJ is not expected to commit to a specific path or timetable for future rate hikes. According to sources cited by Reuters, the central bank will refrain from publishing an updated estimate of its neutral rate the theoretical rate that neither stimulates nor restricts the economy during this meeting. The BOJ currently estimates the neutral range to be between 1% and 2.5%, but has acknowledged uncertainty around this figure.

This strategic ambiguity allows the BOJ to retain flexibility. As global economic uncertainties remain particularly with U.S. tariffs and geopolitical risks it appears the BOJ prefers a gradual approach. Evercore ISI analysts expect the next hike to occur between July and September, contingent on an economic rebound from current soft patches.

Domestic and Global Implications of the BOJ’s Move

The implications of the BOJ’s shift are not limited to Japan’s domestic economy. As Japanese rates climb, the yen may begin to regain strength, reducing its attractiveness as a funding currency in global carry trades. This could reverberate across international markets, particularly in currency and bond sectors.

At the same time, the move may signal the end of Japan’s era as the global outlier in monetary policy. With the European Central Bank and other institutions now holding or cutting rates, Japan’s move in the opposite direction highlights a divergence in monetary policy trajectories.

For Japanese households and businesses, the new policy stance introduces both opportunities and risks. On one hand, higher rates could bolster the yen and curb import-driven inflation. On the other, rising borrowing costs may dampen consumption and investment in a still-fragile recovery.

A Cautious Yet Consequential Shift

The BOJ’s rate hike to 0.75% marks a historic shift in Japan’s post-deflation monetary narrative. While modest in size, the move is symbolically significant, reinforcing the central bank’s commitment to a sustainable inflation path supported by wage growth and domestic demand.

However, the path forward remains cautious. Without a clear commitment on the speed or magnitude of future hikes, the BOJ is signaling its readiness to act, while remaining sensitive to both internal and external risks. In the absence of updated neutral rate estimates, investors will have to rely on Ueda’s language to gauge whether this hike is the beginning of a new chapter or merely a strategic pause in a long journey toward policy normalization.

Source: Reuters

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Samantha Luan

Political

Economic

· Asset plan proved too controversial for quick decision, diplomats say

· Belgium wanted guarantees against potential Russian legal claims

· EU leaders aimed to counter Trump's claim they are 'weak'

European Union leaders decided on Friday to borrow cash to fund Ukraine's defence against Russia rather than use frozen Russian assets, diplomats said.

"We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved," EU summit chairman Antonio Costa posted on social media in the early hours of Friday morning after hours of talks.

Costa did not specify the source of the funding but a draft text of the summit's conclusions, seen by Reuters, said it would come from borrowing on capital markets, secured against the EU budget.

The deal will not affect the financial obligations of Hungary, Slovakia and the Czech Republic, which did not want to contribute to the financing of Ukraine, the text said.

At the same time, EU governments and the European Parliament would continue working on setting up a loan for Ukraine that would be based on the frozen Russian central bank assets, it said.

The loan to Ukraine based on the joint borrowing would only be repaid by Ukraine once it receives war reparations from Moscow. Until then, the Russian assets would remain immobilised and the EU reserved the right to use them to repay the loan, according to the text.

"It's good in the sense that Ukraine will secure funding for 2 years," one EU diplomat said.

The move follows hours of discussions among leaders on the technical details of a loan based on the frozen Russian assets, which turned out to be too complex or politically demanding to sort out at this stage, diplomats said.

"We have gone from saving Ukraine, to saving face, at least that of those who have been pushing for the use of the frozen assets," a second EU diplomat said.

The main difficulty in the use of the Russian money was providing Belgium, where 185 billion of the total 210 billion euros of Russian assets in Europe are held, with sufficient guarantees against financial and legal risks from potential Russian retaliation for the release of the money to Ukraine.

HUNGARY SCORES A WIN

The EU sees Russia's war as a threat to its own security and wants to keep Ukraine financed and fighting.

EU Changes Tack From Using Frozen Russian Assets To Joint Borrowing For Ukraine_1

EU Changes Tack From Using Frozen Russian Assets To Joint Borrowing For Ukraine_2

EU Changes Tack From Using Frozen Russian Assets To Joint Borrowing For Ukraine_3

With public finances across the EU already strained by high debt levels, the European Commission had proposed using frozen Russian central bank assets to secure a huge loan of 90 billion euros to Kyiv, with joint borrowing against the EU budget as a second option.

The joint borrowing was difficult because it requires unanimity. Moscow-friendly Hungary had said it would oppose it, just as it opposed the use of Russian assets.

But Hungarian Prime Minister Viktor Orban appeared to have agreed not to block the borrowing as long as his country, Slovakia and the Czech Republic were excluded from the guarantees for the debt.

"Orban got what he wanted: no reparation loan. And EU action without participation of Hungary, Czech Republic and Slovakia," a third EU diplomat said.

'CAN'T AFFORD TO FAIL'

Several EU leaders arriving at the summit said it was imperative they find a solution to keep Ukraine financed and fighting for the next two years. They were also keen to show European countries' strength and resolve after U.S. President Donald Trump last week called them "weak".

"We just can't afford to fail," EU foreign policy chief Kaja Kallas said.

Ukrainian President Volodymyr Zelenskiy, who took part in the summit, urged the bloc to agree to use the Russian assets to provide the funds he said would allow Ukraine to keep fighting.

"The decision now on the table – the decision to fully use Russian assets to defend against Russian aggression – is one of the clearest and most morally justified decisions that could ever be made," he said.

BELGIUM WANTED MORE GUARANTEES ON RISK SHARING

Belgian Prime Minister Bart De Wever told his country's parliament early on Thursday that he had not yet seen guarantees that answered his concerns on legal and liquidity risks for Belgium to agree to the use of the Russian assets.

Russia's central bank has said the EU plans to use its assets are illegal. It filed a lawsuit in Moscow this week seeking $230 billion in damages from clearing house Euroclear.

The stakes for finding money for Kyiv are high because without the EU's financial help Ukraine will run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.

Source: Reuters

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Inflation Surprise Fuels Market Optimism

U.S. equity markets snapped a four-day losing streak on Thursday after the release of the November Consumer Price Index (CPI), which showed inflation rising at an annual pace of 2.7%. This figure was notably below the 3.1% consensus forecast from economists polled by Dow Jones. Core CPI, which excludes volatile food and energy components, also surprised to the downside at 2.6% versus the expected 3.0%.

Investor sentiment shifted swiftly in response. The S&P 500 rose 0.79%, the Dow Jones Industrial Average edged up 0.14%, and the Nasdaq Composite led the rally with a 1.38% gain. Markets interpreted the data as a green light for potential monetary easing in 2026, with hopes that the disinflationary trend might pave the way for rate cuts.

Data Integrity Under Scrutiny

Despite the initial market cheer, analysts and economists have raised red flags regarding the underlying reliability of November’s inflation report. The Bureau of Labor Statistics (BLS) confirmed that the data was affected by the historic 43-day government shutdown, which prevented the collection of October price data and forced the use of partial or outdated inputs.

For example, certain October data were “carried forward” from September, and in some housing categories, inflation was reportedly recorded as zero. Evercore ISI’s Krishna Guha suggested that this likely led to distorted figures in rent and shelter inflation for selected cities. These adjustments render the report statistically noisy, raising concerns that the CPI may not accurately reflect current inflationary pressures.

This deviation introduces ambiguity in interpreting whether the decline in inflation is a real structural improvement or a technical artifact of incomplete data. Federal Reserve Chair Jerome Powell once likened monetary policy to “navigating by the stars under cloudy skies.” In this case, analysts argue that the available stars might not be stars at all, but mere projections shaped by missing information.

Mixed Signals for Fed Policy

While the CPI figures appear dovish on the surface, the lack of clarity on short-term inflation dynamics complicates the Federal Reserve’s policy calculus. If policymakers assume the November figures are skewed downward, they may hesitate to adjust interest rates based solely on this data point.

Nonetheless, the market’s reaction reflects broader expectations of easing in 2026, especially if inflation readings in the coming months validate the current trend. José Torres, senior economist at Interactive Brokers, emphasized that a sustained inflation rate below 3% would significantly support the case for monetary accommodation in the coming year.

Yet, the absence of October’s data and the methodological compromises made in November’s report mean the Fed might remain cautious in its December assessment. Without a full inflation trajectory, the risk of misjudging the price outlook remains high.

Holiday Euphoria Meets Structural Ambiguity

The strength of Thursday’s market rebound may also reflect seasonal factors, with investors exhibiting optimism as the year-end approaches. Boosted further by a 10.2% surge in Micron shares following an earnings beat, investor sentiment appears to be driven by a mixture of holiday cheer and macro hope.

However, the durability of this rally hinges on future data clarity. If January or February inflation figures reveal that November’s dip was misleading, the Fed may pivot back toward a more hawkish stance, dampening expectations for early rate cuts.

Market Reaction Outpaces Policy Reality

While investors welcomed the CPI surprise as a signal of easing inflation, the structural integrity of the data undermines its reliability as a policy guide. The lack of monthly comparisons, the use of outdated inputs, and acknowledged zero-inflation placeholders cast a shadow over the report’s credibility.

In the absence of robust data, market enthusiasm may prove premature. The true state of inflation will only become clearer once future reports correct for current gaps and inconsistencies. Until then, monetary policy remains suspended in uncertainty with the path of rate decisions likely to depend less on a single report and more on a longer-term trend that is yet to be confirmed.

Source: CNBC

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The makeshift memorial outside the Barus & Holley engineering building continues to grow as the manhunt continues for the gunman, following a shooting at Brown University in Providence, Rhode Island, U.S. December 17, 2025. REUTERS/Taylor Coester

Law enforcement officers are investigating a link between a mass shooting at Brown University in Providence that killed two people last weekend and the shooting death of a Massachusetts Institute of Technology professor two days later near Boston, a person familiar with the matter said.

The source, who spoke on condition of anonymity as they were not authorized to discuss the matter, did not provide more details on why investigators think the two cases may be linked.

The new twist comes five days after the shooting at Brown University and during a manhunt for the shooter. The violence shook Rhode Island's capital city of Providence, and brought pressure on investigators to crack open the case.

The Brown shooting occurred on December 13 inside a classroom building, killing two students and wounding at least eight others.

Two days later, MIT professor Nuno Loureiro, 47, was fatally shot in his home in Brookline, Massachusetts on Monday evening. Brookline is 49 miles north of Brown's campus.

Earlier this week, an FBI official said authorities did not believe there was any link between Saturday's shooting at Brown and the MIT's professor's murder. Loureiro was a member of the departments of nuclear science and engineering and physics as well as MIT's Plasma Science and Fusion Center.

SEEKING THE PUBLIC'S HELP

Investigators in Providence said the suspect in the Brown University shooting escaped on foot into nearby streets, prompting a search that relied heavily on residential security footage because of a lack of surveillance cameras in the classroom building and surrounding area.

Police released images and video of a masked man believed to be the shooter, based on survivor accounts, and have repeatedly asked for the public's help in identifying that man. The footage showed the suspect walking in a nearby neighborhood both before and immediately after the attack, including moments when police vehicles arrived with flashing lights.

"He could be anywhere," Providence Police Chief Oscar Perez said on Wednesday, adding that authorities did not initially know the suspect's identity or motive.

Providence Mayor Brett Smiley said residents and students had grown "restless and eager" for an arrest as the search stretched into several days.

Police also circulated photos of another unidentified man seen near the area, saying they wanted to speak with him as a potential witness who may have relevant information.

Authorities initially announced a person was in custody a day after the shooting, but later released that individual after determining he was not involved.