Stick to the plan

The northern hemisphere has now entered the brighter half of the year, the days getting longer, lighter and warmer. Financial markets are also brightening. The past week has been good across the global board for equities and bonds.

The most obvious reason for the positivity (apart from the season) is that most of the world’s central banks are in a giving mood. Meetings were held here in the UK, and in the US, Japan, Switzerland and many other nations. The majority left rates unchanged but most indicated that rates are set to fall in the next few months.

Japan’s rates are up – and so are markets

In what for many is a once in lifetime event, the Bank of Japan has raised interest rates. In the 17 years since the central bank last delivered a hike, markets have endured a global financial crisis, a pandemic, a war in Europe and the assassination of Japan’s own former Prime Minister Shinzo Abe. The Bank of Japan (BoJ) has stayed firm through all that, but at long last the era of negative rates – dating back to a subzero cut in 2016 – is over. Governor Kazuo Ueda announced last Monday that Japanese rates will go up from -0.1% to a range between 0.0% and +0.1%.

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