SMBC DAYRISE SECURITIES: THE CENTRAL BANK OF JAPAN IS EXPECTED TO RAISE INTEREST RATES IN OCTOBER

ON 9 JULY, SMBC'S DAY-TO-DAY SECURITIES ECONOMIST, MARU YAO ZHENGZHENG, INDICATED THAT, GIVEN THE OUTCOME OF THE MEETING OF THE GOVERNOR OF THE CENTRAL BANK OF JAPAN ON THURSDAY, THE CENTRAL BANK OF JAPAN MIGHT STILL EXPECT TO RAISE INTEREST RATES AGAIN IN OCTOBER. THE GOVERNOR OF THE CENTRAL BANK OF JAPAN NOTED THAT, DESPITE THE TENSE SITUATION IN THE MIDDLE EAST, PRODUCTION REMAINED RESILIENT AND THAT THERE WAS POTENTIAL FOR FURTHER PRICE TRANSMISSION. ACCORDING TO YANAYAMA, “IN GENERAL, THIS CAN BE SEEN AS A STEP TOWARDS A FURTHER INCREASE IN INTEREST RATES. HOWEVER, THE REPORT OF THE CENTRAL BANK OF JAPAN AND THE REPORT OF THE GOVERNOR OF THE BRANCH DID NOT CONVEY A SENSE OF URGENCY FOR AN IMMEDIATE INCREASE IN INTEREST AT THE NEXT MEETING.”