Major central banks worldwide, led by the Federal Reserve, will make rate decisions next week, with market attention focused on the Fed’s FOMC meeting and the Bank of Japan’s policy. U.S. interest-rate trends, the impact of a stronger yen and the launch of after-market trading in South Korea will also be key factors.
Next week will be a “big week,” with policy decisions from the Federal Reserve, the Bank of Japan and the Bank of England coming in quick succession. The ECB’s decision is due this week, but markets are seeking to assess the path of interest rates ahead, with monetary policy in each country set to shape the direction of global markets. The Fed and BOJ are emerging as the main focus.
The Fed’s FOMC meeting will be held from 15 September, with the rate decision expected to be announced at 3:00 a.m. Japan time on 17 September. Markets are increasingly tilting toward a rate hike, while the publication of the dot plot and economic projections will also be closely watched. Recent employment and inflation data, along with developments involving Trump, are also cited as factors in the decision.
The Bank of Japan is expected to decide its policy rate on 18 September, with markets viewing an additional hike of around 25bp as almost certain. The potential for further policy normalization will also be discussed against the backdrop of a stronger yen, carry-trade unwinding and market conditions. Growing caution over further yen appreciation is emerging as a market factor.
The U.S. Treasury’s announcement of the scale of its government bond purchases is attracting market attention and is expected to affect long-term interest rates. The South Korean market will launch after-market trading, and the extension of trading hours and changes to price limits may affect market liquidity.