The Bank of Japan May Soon Be in Rate-Hiking Mode

The Bank of Japan May Soon Be in Rate-Hiking Mode By Hardika Singh

The Bank of Japan governor said foreign-exchange fluctuations are more likely to affect prices now than they did in the past. Meanwhile, last week's slowdown in job growth doesn't mean a recession is on the way. And a report indicates FDIC Chairman Gruenberg has anger issues. Read on for this news and more.

Top News BOJ Governor Says Early Rate Hike Possible if Prices Rise Faster Than Expected

Bank of Japan Gov. Kazuo Ueda said Wednesday that he is open to the idea of early interest-rate increases if inflation rises at a faster pace than the bank's projections. "If the outlook for prices is revised upward or if upside risks become high, it will be appropriate for the bank to make an earlier adjustment of the policy interest rate," Ueda said at an event held by the Yomiuri International Economic Society.

BOJ Board Becoming More Concerned About Effects of Weaker Yen U.S. Economy Profits Are Booming-and That's Shielding the Economy

Job growth took a step down in April , as reported in Friday's employment numbers. But there is a world of difference between a slightly weaker labor report and the types of job losses that could push the economy into a recession. With corporate profits on an upswing, a major downturn in the economy could be far away.

Financial Regulation FDIC Investigation Finds Culture Rife With Sexual Harassment, Discrimination

Sexual harassment, bullying and discrimination have long pervaded the Federal Deposit Insurance Corp., with perpetrators often receiving reassignments and even promotions, according to a blistering report on the agency's culture that calls into question the leadership of Chairman Martin Gruenberg.

The report was commissioned by the FDIC after a Wall Street Journal investigation in November revealed a toxic workplace culture at the agency.

Forward Guidance Thursday (all times ET)

8:30 a.m.: U.S. weekly jobless claims

10 a.m.: Bank of Canada publishes Financial System Review

4:30 p.m.: Federal Reserve balance sheet

Friday

2 a.m.: U.K. GDP for March and first quarter

2 a.m.: U.K. industrial production for March

8:30 a.m.: Canada labor force summary for April

10 a.m.: Philadelphia Fed Survey of Professional Forecasters

10 a.m.: University of Michigan consumer survey for May, preliminary

10:30 a.m.: Bank of Canada publishes Senior Loan Officer Survey

12:45 p.m.: Chicago Fed's Goolsbee speaks to the Economic Club of Minnesota

Research Fed Has Narrow Margin to Keep Rates Unchanged

Any change in U.S. economic data "feeds directly into the policy rate prescription" and could trigger an interest rate move by the Fed, Deutsche Bank economists say in a note. They say current conditions support "a modest reduction in rates," but they believe the Fed is leaning toward no action to ensure disinflation is on track. Year-over-year core PCE inflation "needs to sustainably fall from current levels, coupled with evidence of more disinflation over shorter time horizons for the Fed to actively consider cutting rates," the economists say. An increase in unemployment to 4.2% could also trigger a cut. A 3.3% core PCE could lead to a hike, Deutsche Bank says. - Paulo Trevisani

Basis Points Recent data releases reveal improvements in the German services sector, German exports and eurozone purchasing managers indices, driving performance in risk assets like credit, LBBW analysts Michael Koehler and Benedikt Horwedel say in a note. "Overall, the fundamental environment within the euro area has brightened in recent weeks, albeit still at a low level," the analysts say. Markets increasingly expect central banks to start interest-rate cuts in the coming months, boosting appetite for risk assets, LBBW says. - Miriam Mukuru Surprise fees are widely hated, but they are still sneaking onto the bottom of bills for everything from concert tickets to dinners out. Business owners say fees are needed to cover costs and show customers where their money is going. But retail analysts and advocates like the Consumer Financial Protection Bureau (CFPB) say secondary fees diminish people's ability to shop around. CFPB data also show fees cause people to pay more overall because businesses can charge more than what the market will let them get away with in the sticker price. - Rachel Wolfe Malaysia's central bank held its benchmark interest rate unchanged again , extending its policy pause to a year as it keeps a watchful eye on growth and inflation. - Ying Xian Wong China's exports swung back to growth in April after a short-lived drop in March, continuing to prove a driver for the world's second-largest economy as it struggles to revive domestic demand. About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

05-09-24 0720ET