Stocks

Mid Morning Market Update

  • The Bank of Japan (BoJ) kept its short-term interest rate at 0.50%, as expected, with a vote of 8–1. It outlined a plan for gradually reducing JGB purchases — a reduction of ¥400 billion per quarter through Q1 2026, followed by ¥200 billion per quarter through Q1 2027.
  • The BoJ emphasized downside risks and slow inflation, signaling no rush for further rate hikes.
  • The BoJ noted moderate economic recovery but pointed to weakening corporate profits and a global slowdown. CPI inflation is expected to remain low in the short term. The central bank remains cautious given global policy and trade uncertainty.
  • The decision was in line with market expectations and had no impact on the USD/JPY exchange rate, which remains stable today around 144.630.
  • Trump denied leaving the G7 due to the ceasefire between Iran and Israel. The president tweeted that the reason was “much more important,” but did not provide details. His departure briefly triggered a drop in risk appetite across markets.
  • Trump later posted that Iran “must never have nuclear weapons” and called for the immediate evacuation of Tehran. The message caused a swift market reaction: oil jumpedgold spiked, and S&P futures dropped. Later reassurances that the U.S. does not plan to strike Tehran helped calm the markets.
  • G7 leaders confirmed that Iran must not acquire nuclear weapons and expressed support for Israel’s right to self-defense. The statement called for de-escalation and pledged to monitor the impact on energy markets.
  • Trump proposes talks with Iran on a nuclear deal and a ceasefire. The proposal to begin negotiations has been confirmed by multiple sources familiar with the matter. It’s seen as an attempt to open a diplomatic path amid rising tensions.
  • The U.S. had prepared stricter export restrictions against China, which were set to take effect if trade talks in London failed. The measures included an expansion of bans on semiconductors and related manufacturing equipment. Since the talks concluded positively, the restrictions were not implemented.
  • The EU has reportedly refused to continue negotiations with China. The decision signals disappointment with the lack of progress and growing mistrust. The move comes ahead of the EU–China leadership summit scheduled for next month.

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