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Bank of Japan Lifts Rates to 31-Year High
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- The Bank of Japan raised its policy rate to 1% from 0.75% on Tuesday, a 31-year high, to counter inflation risks.
- The BOJ cited a risk of underlying inflation accelerating above its 2% target due to rising energy costs.
- Economists expect further rate increases might be difficult, as Prime Minister Sanae Takaichi favors accommodative monetary conditions.
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Australia’s Central Bank Holds Interest Rates, Warns More Hikes May Come
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- The Reserve Bank of Australia held its official cash rate at 4.35% but warned higher fuel prices could force further tightening.
- The RBA said inflation is likely to remain elevated due to surging oil prices.
- Australia’s economy expanded 0.3% in the three months through March, down from 0.9% growth in the prior quarter.
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Impact of Iran War to Persist Despite Deal Offering Hope for Peace, ECB’s Nagel Says
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- A deal between Iran and the U.S. to end fighting offers hope, though energy price impacts will persist, Bundesbank President Joachim Nagel said.
- The European Central Bank raised its key interest rate by a quarter-point last week as inflation swelled after the war outbreak.
- Bundesbank lowered its German growth forecast to 0.5% for this year and 0.8% for 2027, down from December’s anticipation.
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Central Banks Are Rethinking Where They Store Their Gold
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- Central banks are increasingly diversifying gold vaulting locations due to geopolitical concerns, according to a World Gold Council survey.
- Fewer central banks now store bullion in London and New York than a year earlier, with the Bank of England and New York Federal Reserve seeing declines.
- A total of 19% of central banks increased domestic storage or diversified overseas vaulting locations over the past 12 months.
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China’s Consumer Spending Falls for First Time Since Covid
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- China’s retail sales contracted 0.6% from a year ago in May, the first fall since the pandemic, amid a continued exports boom.
- Fixed-asset investment shrank 4.1% in January-May, worse than prior periods, as the property-sector slump continued.
- Dollar-denominated exports surged almost 20% year-over-year in May, suggesting Beijing is unlikely to roll out stimulus soon.
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German Investor Confidence Jumps on Hopes of End to Middle East Conflict
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- German investor confidence rose sharply in June, with the ZEW Indicator reaching 10.5 amid hopes for an end to the Middle East war.
- The ZEW indicator’s rise was attributed to expectations of easing energy prices and inflation, which would strengthen German domestic demand.
- Expectations brightened for Germany’s automotive, chemical, and pharmaceutical sectors, but retreated for the construction sector.
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New York Manufacturing Activity Grew at a Slower Pace in June
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- Factory activity in New York State grew less than expected in June, with the Empire State Manufacturing Survey index falling to 5.7.
- Input price and selling price increases remained elevated, delivery times lengthened, and supply availability worsened in June.
- Employment expanded for a fifth consecutive month, and firms maintained a fairly optimistic outlook for business activity.
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About Us
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WSJ Pro Central Banking brings you news and analysis from a global team of reporters and editors at The Wall Street Journal and Dow Jones Newswires. Send your tips, suggestions and feedback to service@dowjones.com. An artificial-intelligence tool created these summaries, which are based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
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