On Wednesday (November 6), driven by the overnight rebound of the three major US stock indices, Asia-Pacific stock indices generally rose. The Japanese stock market opened higher for the second consecutive day, with the Nikkei 225 index gapping up by 1.32%, marking a recent high in gains. Other major Asia-Pacific markets also performed well, with the Taiwan Weighted Index and South Korea's KOSPI index following the rise, reflecting a slight recovery of market confidence in the global economic outlook. However, the main indices of Hong Kong stocks experienced slight adjustments, indicating that investors remain cautious about the short-term trend of Hong Kong stocks.
In the minutes of its September meeting released today, the Bank of Japan pointed out that if economic growth and inflation align with expectations, it will continue to advance interest rate hikes. This stance suggests that Japan may begin to gradually reduce its easing policies and delve deeper into adjusting interest rates in the future. However, the minutes also showed the central bank's high concern for global macroeconomic risks, including market instability and uncertainties in overseas economic prospects.
Several members in the minutes suggested that the Bank of Japan should thoroughly evaluate the specific causes of market volatility and not just rely on market appearances. One member particularly noted that global economic turbulence remains significant, urging the Bank of Japan to cautiously approach interest rate hikes and delay policy adjustments until global market uncertainties diminish. Another member proposed that policy-making should more focus on economic downside risks, especially against the backdrop of slowing US economic growth, increasing global inflation pressures, and supply chain uncertainties.
From a macroeconomic perspective, the Bank of Japan's interest rate hike stance reflects its optimistic expectations for domestic economic recovery, especially given the steady rise in consumer spending and core inflation. Although Japan's economy currently faces challenges such as labor shortages and rising raw material costs, the central bank believes these factors may moderately elevate prices, thus supporting the implementation of interest rate hike measures. The meeting minutes also predict that if the macro environment is stable, policy rates could reach 1% in the second half of the 2025 fiscal year, further indicating the Bank of Japan's confidence in stable economic growth in the future.
However, the current interest rate hike policy also faces certain risks. The market worries that if the global economic recovery fluctuates, interest rate hikes may hinder the growth of Japan's export-oriented economy, leading to yen appreciation and affecting corporate competitiveness. Furthermore, the market is highly sensitive to the future path of the Federal Reserve's monetary policy, particularly as sustained tightening by the Federal Reserve will pose significant pressure on global market liquidity.
