BoJ flags further hikes, Sino-Japan rift hits tourism

With the outcome of today’s meeting no great surprise, the Bank of Japan used it to lock in expectations that further policy rate increases will follow. One potential obstacle is an imminent fall in inflation linked to tax changes and energy rebates. But Governor Ueda was clear today that as long as underlying inflation remains firm, the Bank will continue to tighten. Meanwhile, flight cancellations are soaring in the latest sign of Beijing’s displeasure with Prime Minister Takaichi. More than a third of this week’s scheduled flights between the two countries failed to take off.