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[BUSINESS] · Japan, Australia · 49 sources

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Bank of Japan and RBA weigh interest rate paths amid inflation risks

Central banks in Japan and Australia are navigating complex inflationary landscapes. A summary of the Bank of Japan’s July meeting reveals that policymakers are debating an acceleration of interest rate hikes. While the policy rate was held at 1%, members noted that the risk of waiting to adjust rates may be significant. Key drivers for potential hikes include rising import costs from a weak yen, artificial intelligence-related demand, and energy price volatility stemming from Middle East conflicts.

In Australia, the Reserve Bank of Australia (RBA) has maintained its cash rate at 4.35% for a second consecutive meeting. The decision was unanimous, reflecting an economy that is slowing as expected. However, the RBA warned that inflation remains too high and is not projected to return to the 2% to 3% target band until late 2027 or early 2028. Governor Michele Bullock emphasized that the board remains prepared to implement further rate increases if upside risks to inflation materialize. The Australian housing market has also shown signs of cooling, with falling prices in several major cities and a decline in new loan applications.

Entities

Bank of Japan · Cabinet Office · Japan · Kazuo Ueda · Michele Bullock · Middle East · Reserve Bank of Australia · Sanae Takaichi

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Sources

RBA Keeps Interest Rates On Hold [www.wyndhamtv.com.au]
RBA fires inflation warning shot [www.macrobusiness.com.au]