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RBA to hike aggressively as inflation surges

The surge in inflation would warrant a rate hike at the Reserve Bank of Australia’s upcoming meeting on 3rd May. But we think the Bank will wait until the June meeting, where we now expect the cash rate to rise to 0.50% We expect rates to reach 2% by the end of this year and 2.5% by mid-2023, which would be a bit more aggressive than the Bank’s last two tightening cycles.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Update

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Australia & New Zealand Data Response

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BoJ to widen 10-year yield tolerance band further

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26 April 2022

Japan Economics Weekly

Fresh yen & bond market turmoil, poor growth outlook

The Bank of Japan had to step in yet again to defend its 10-year yield target this week, but it didn’t have to go to the same lengths as in late-March to keep yields in check. With yields nailed to the floor, the yen continued to slide rapidly against the dollar, but we doubt that the Finance Ministry’s jawboning will be followed up by actual intervention. Meanwhile, Japan’s population fell at the fastest pace on record last year. Unfortunately, a shrinking population is now being compounded by falling productivity. The upshot is that the long-term prospects for Japan’s economy are increasingly grim.

22 April 2022
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