Japan’s ruling party is said to be running into a bit of trouble in appealing to the upper house ahead of the upcoming election, expected in July, and is considering to offer cash handouts to all citizens without an income cap. After having scrapped initial plans for a one-time cash handout to counter Trump’s tariffs and then now making clear that they will not pursue a consumption tax cut, Japan’s ruling party needs something to mark as the pillar for the election. And this looks to be their latest idea.
A source noted that: “If we put an income limit on it, it will take time”. We can probably make the amount 20,000 yen or more.”
However, there are certain quarters in the government that are calling for the exclusion of high-income earners. So, nothing is set in stone just yet.
The report adds that the cash handouts will be funded by the increase in tax revenue in the fiscal year 2024 – set to be finalised in July.
This article was written by Justin Low at www.forexlive.com.
*for the SNB, the rest of the probability is for a 50 bps cut
Rate hikes by year-end
From the last update, we saw more of a hawkish repricing in interest rates expectations following the higher than expected NFP and less dovish that expected central banks decisions.
Most central banks will now want to see how the economic data evolves throughout the summer before deciding on the next policy move.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
For now at least, the dollar is holding lower as the woes continue for the currency. USD/JPY is down 0.5% to near 144.00 after backing away from another run up to 145.00 at the end of last week. Meanwhile, AUD/USD buyers are starting to test the waters for a firmer break above the 0.6500 mark so that is one to watch out for as well.
Traders are keenly awaiting details on US-China trade talks in London today but so far there is no word on when exactly it will happen.
The two sides are no doubt scrambling to sort out an agenda, with market players definitely eyeing discussions about rare earth supplies. China is even seen offering a gesture of goodwill here. So, that will at least help to ease some of the tensions before the two sides meet later in the day.
That being said, it is still doubtful that we will see any material progress. There were nice words exchanged in Geneva but not much real headway after. And I would expect the same to be seen this time around as well.
Sure, there might be some gestures of amity to be expected after. But a proper trade deal and one that will see both sides honour it? Still a pipedream more than anything else if you’d ask me.
This article was written by Justin Low at www.forexlive.com.
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