International News 27/12
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Bank of Japan officials argue over interest rate hike
The Bank of Japan (BOJ) held a meeting in October to discuss its monetary policy. While members agreed to continue raising interest rates as long as the Japanese economy progresses as expected, some members urged caution due to uncertainties in the global economy. Despite inflation projections nearing the BOJ's target of 2%, interest rates were kept on hold at 0.25%. The meeting highlighted concerns about risks to overseas economies, including the United States, and global market instability. The decision to keep rates unchanged was made to address heightened uncertainties both domestically and overseas. The BOJ also decided to keep rates on hold in its subsequent meeting in December, as they awaited more data on wage increases for the next year and sought more certainty regarding the policies of incoming US President Donald Trump.
Toyota to Build Factory in China to Produce Electric Vehicles
Toyota Motor plans to construct a new factory in China to manufacture electric vehicles, specifically its luxury car brand Lexus. The facility, located in Shanghai, will represent a shift from the Japanese automaker's current strategy of operating through joint ventures with local manufacturers. According to sources cited by Nikkei, Toyota aims to begin production at the plant around 2027. The company has not publicly disclosed the details of this development, as confirmed by a Toyota spokesperson in a statement to Reuters. This strategic move underscores Toyota's commitment to strengthening its foothold in the Chinese electric vehicle market and spotlights China's rising prominence in the global electric vehicle sector.
Forex: US Dollar Keeps the Lead Ahead of Year-End Holiday
The US dollar is currently the dominant currency in the foreign exchange market, as concerns over high US interest rates have led to a weakening of other currencies, which have approached new lows.As the year-end approaches, trading volumes are expected to decline due to the shortened work week caused by holiday periods.With no major economic data releases scheduled, the interest rate theme is likely to continue driving market movements.The Japanese yen is under pressure, nearing its lowest level in five months. This has led to speculation about the potential intervention of Japanese authorities, which has in turn led to a sense of caution among traders.In contrast to the Federal Reserve's more hawkish outlook, the Bank of Japan has maintained a cautious stance on interest rates, remaining silent on future hikes. As a result of these factors, the yen is anticipated to weaken further.The euro, meanwhile, is approaching its two-year low, and the pound sterling has also experienced a depreciation.
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