Please see today’s daily update from EPIC Investment Partners below:
To call it well flagged would be an understatement. Overnight, the Bank of Japan (BoJ) ended the world’s last negative rate policy, raising interest rates for the first time in 17 years. The central bank raised rates to the range of 0% to 0.1%, from -0.1%, after acknowledging its long-held goal of 2% inflation was within sight. The bank will also scrap its yield curve control (YCC) policy, along with purchases of exchange traded funds and Japan real estate investment trusts (J-REITS). However, it will continue buying long-end JGB’s at “broadly the same amount” as before.
As we mentioned in Friday’s Daily Update, it was reported that the BoJ’s decision hinged on the outcome of the yearly wage negotiations by Japan’s largest union, Rengo. Japan’s largest companies agreed to hike wages by 5.28% for 2024, the largest increase in 33 years, and 3.5% above the average of the last 20 years.
In the statement released after the decision, the BoJ said: “Services prices have continued to increase moderately, partly due to the moderate wage increases seen thus far”. “As these recent data and anecdotal information have gradually shown that the virtuous cycle between wages and prices has become more solid, the Bank judged it came in sight that the prices stability target would be achieved in a sustainable and stable manner toward the end of the projection period of the January 2024 outlook report,” the central bank added.
In the post-meeting news conference BoJ Governor Kazuo Ueda comments were balanced. Ueda admitted that the stronger-than-expected wage growth had played a large role in the decision. He reiterated that the price target was within sight and that the upward economic cycle has been confirmed by recent data releases. However, he expects the BoJ to remain accommodative until the underlying inflation eventually reaches 2%, whilst not taking the option of future hikes off the table.
Talking of inflation, one person whose prices have sky-rocketed over the last year is the tooth fairy. According to a report in the WSJ, it appears that if the tooth fairy leaves your little ones a pound under their pillow for their teeth, they are entitled to feel hard done by.
In 2023, the average payout for a lost tooth in the US was at a record high of $6.23, a 20% increase from 2022. However, that’s not the half of it. The report also states some of the jaw-dropping items some children get for losing their teeth. This includes silver fairy necklaces, Louis Vuitton bracelets, even brand-new iPhones!
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Charlotte Clarke
19/03/2024