Hawkish BOJ and Trump's $5K Checks Electrify Markets Ahead of PPI Data
Markets are reacting to hawkish comments from Bank of Japan board member Kazuyuki Masu, who signaled the need for further interest rate hikes to reach a neutral rate. The strong impact of the weak yen and a concerning rise in producer prices of 7% could translate into higher consumer inflation.
A survey of economists found that 97% expect a rate hike to 1.25% as early as September 18, while the Bank of Korea linked recent sharp fluctuations in the Kospi index to high financial leverage used by both domestic and foreign investors.
Donald Trump's campaign promise to give one-time check payments of $5,000 for every adult American if Republicans gain full control of Congress has sparked concern about its feasibility and potential impact on the budget deficit.