The US FOMC and the Bank of Japan are both scheduled to meet in September, making it important to assess not only whether rates will be raised, but also the underlying trends in prices, employment and wages and their impact on corporate earnings. Individual investors should review their holdings from three perspectives: interest rates, foreign exchange and earnings.
The US Federal Open Market Committee (FOMC) and the Bank of Japan’s Monetary Policy Meeting are scheduled for September, creating conditions in which interest-rate outlooks in both countries are likely to influence equity and foreign-exchange markets. It is considered important to assess not only whether rates will be raised, but also the reasons for the decision and its impact on prices, employment, wages and corporate earnings. The US FRB has kept its target range at 3.50–3.75%, but internal views are divided over the need for additional tightening.
The US market outlook is expected to change depending on price stability and employment conditions. If inflation remains contained and employment and consumption do not deteriorate, concerns about additional rate hikes are likely to ease. However, the situation could change if higher oil prices or other factors push up inflation and affect corporate earnings outlooks. The August CPI data are scheduled to be released on 11 September and are attracting attention.