/cloudfront-us-east-2.images.arcpublishing.com/reuters/DQ522HYDSJJCTMDM2QGBVL5P4Y.jpg "Morning Bid: After the hawks, here comes the Bank of Japan dove")
June 16 (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.
The Bank of Japan, the most dovish major central bank in the world, announces its latest policy decision on Friday, with markets highly sensitive to signs of when and to what degree it will ditch its super-loose policy.
Asian markets should go into the decision on the front foot, after the S&P 500 and Nasdaq closed at 14-month highs on Thursday as investors bet that U.S. interest rates are close to peaking.
The BOJ follows surprisingly aggressive interest rate increases and guidance recently from policymakers in Canada and Australia, and this week’s hawkish signals from the European Central Bank and, to a lesser extent, the U.S. Federal Reserve.
The BOJ remains the outlier among major central banks, promising to maintain its loose policy until it is sure inflation meets the 2% target. Polls, sources and market moves all suggest no move on rates or the yield curve control (YCC) scheme, leaving the focus on BOJ Governor Kazuo Ueda’s press conference.
While the Fed and others have tightened policy by 500 basis points or raised rates to their highest in decades, Japanese interest rates are still negative and the central bank is buying unlimited amounts of bonds to cap yields at a certain level.
Around half of the economists in a Reuters poll expect a rollback of easing, including a tweak to YCC, in either July or September. Ueda could open the door to this on Friday, nodding to inflation currently overshooting BOJ forecasts and a potential upgrade to BOJ price projections in July, they said.
But Ueda has stressed the need to maintain ultra-loose policy until durable wage growth accompanies rising prices. Changes to YCC may come as soon as July, but an interest rate hike is a long way off – Bank of America analysts think rates will stay on hold until summer 2024.
If Japanese assets are any indication, investors expect Ueda and his colleagues to err on the dovish side.
The yen on Thursday slid to a new low for the year through 141.00 per dollar and, most remarkably after the ECB made it clear it will raise rates further, to a 15-year low against the euro of 153.68 per euro.
Japanese authorities will be watching these developments closely and intervention to stop the rot cannot be ruled out. Perhaps 145.00 per dollar would be the trigger.
The cheapness of Japan’s currency has made its stock markets extremely attractive to foreign investors. The benchmark Nikkei 225 index rose to fresh 33-year high of 33,767 points on Thursday before closing marginally lower.
Here are key developments that could provide more direction to markets on Friday:
– Japan monetary policy decision
– Euro zone inflation (May, final reading)
– Fed’s Bullard, Waller and Barkin all speak
By Jamie McGeever;
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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German Chancellor Friedrich Merz has doubled down on comments he made about migration, saying many Germans and Europeans are “afraid to move around in public spaces.”
Merz has rejected criticism from some German political circles over his government’s tough stance on illegal immigration.
“But we still have this problem in the cityscape, of course, and that’s why the federal interior minister is facilitating and carrying out large-scale deportations,” he said during a visit to Potsdam last week.
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German Chancellor Friedrich Merz sparked backlash while remarking about the country’s migration policies. (Thomas Traasdahl/Ritzau Scanpix via AP)
The statement prompted backlash, some accusing the German leader of being racist. He rejected the criticism while on the sidelines of a summit on the Western Balkans in London, saying migrants were “an indispensable part of our labor market,” German-based DW News reported.
He also claimed that many people in Germany and across Europe are nonetheless “afraid to move around in public spaces” because of migrants “who do not have permanent residence status, do not work and do not abide by our rules,” the outlet reported.
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Numerous demonstrators gather for a demonstration in Berlin Oct. 19, 2025, with the slogan “Brandmauer hoch!” (“We are the cityscape”), referring to a statement made by Chancellor Merz in reference to migration policy. (Annette Riedl/picture alliance via Getty Images)
“I don’t know whether you have children. If you do, and there are daughters among them, ask your daughters what I might have meant. I suspect you’ll get a pretty clear and unambiguous answer. There’s nothing I need to retract,” he said when asked if he would withdraw his earlier remarks.
Some have signed a petition disputing Merz’s comments. The signees include actor Marie Nasemann and environmental activist Luisa Neubauer.
“There are approximately 40 million daughters in this country. We have a genuine interest in ensuring that our safety is taken seriously,” Neubauer wrote on Instagram. “What we are not interested in is being misused as a pretext or justification for statements that were ultimately discriminatory, racist and deeply hurtful.”
Viktor Orbán’s political advisor, Balázs Orbán, told Euronews that the two Prime Ministers are discussing his Smer party joining the Patriots for Europe. If Fico joins, the Patriots could add two new prime ministers, including the Czech Republic Andrej Babiš.
WASHINGTON/OAKLAND, Oct 23 (Reuters) – Donald Trump will not deploy federal agents to San Francisco, the U.S. president and the California city’s mayor said in separate social media posts on Thursday, a surprising stand-down as Trump pressures Democratic-led cities around the country to step up enforcement against crime and illegal immigration.
San Francisco Mayor Daniel Lurie, a Democrat, said in a post on X that Trump called him Wednesday night to tell him he was calling off any plans for a federal deployment. Lurie said the city would continue to partner with federal agencies to combat drug crime, but that “militarized immigration enforcement” would not help.
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“We appreciate that the president understands that we are the global hub for technology, and when San Francisco is strong, our country is strong,” Lurie said.
Trump confirmed the agreement in a post on Truth Social, saying the federal government had been preparing a surge in San Francisco but would cancel it.
“I spoke to Mayor Lurie last night and he asked, very nicely, that I give him a chance to see if he can turn it around,” Trump said. “The people of San Francisco have come together on fighting Crime, especially since we began to take charge of that very nasty subject.”
The Republican president said two major tech executives – Nvidia CEO Jensen Huang and Salesforce CEO Marc Benioff – had called him “saying that the future of San Francisco is great.”
Trump had indicated San Francisco would be a next stop for National Guard troops he was sending to various U.S. Democratic-led cities, moves that have been challenged in courts.
Item 1 of 4 Canada geese fly overhead while people hold placards as they protest against the arrival of federal agents at the Coast Guard base in Alameda, California, U.S, October 23, 2025. REUTERS/Manuel Orbegozo TPX IMAGES OF THE DAY
Despite the apparent stand-down, a handful of U.S. Border Patrol vehicles arrived at a U.S. Coast Guard base in the Bay Area on Thursday morning and were met with several hundred protesters.
Demonstrators carried signs reading “Stop the Kidnappings” and “Protect Our Neighbors,” with one protester smacking the window of a truck as it passed by. Federal agents eventually used less-lethal rounds to disperse the crowd, with protesters saying one person was injured by a projectile and that another had their foot run over.
Oakland Mayor Barbara Lee, the former member of Congress and civil rights activist, said in televised remarks that a federal deployment would divide and intimidate.
“We will not allow outsiders to create chaos or exploit our city,” said Lee, a Democrat.
Trump aims to deport record numbers of immigrants in the U.S. illegally, portraying them as criminals and a drain on U.S. communities. Democrats in major U.S. cities have criticized the crackdown, saying it has terrorized law-abiding residents, separated families and hurt businesses.
Trump has long highlighted what he views as rampant crime in San Francisco and had signaled in recent weeks that he would send federal agents there.
“We’re going to San Francisco and we’ll make it great,” Trump told Fox News on Sunday.
Reporting by Jasper Ward in Washington and Nathan Frandino in Oakland; Additional reporting by Susan Heavey and Doina Chiacu in Washington and Peter Henderson and Max Cherney in San Francisco; Writing by Ted Hesson; Editing by Rami Ayyub and Diane Craft
Our Standards: The Thomson Reuters Trust Principles.
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