2025-12-01 07:02
BOJ to weigh 'pros and cons' of rate hike in December, Ueda says Rate hike is easing of accelerator, not applying brakes -Ueda Yen, bond yields rise as markets raise bets of December hike BOJ to offer more clarity on distance from neutral rate after hike to 0.75% -Ueda NAGOYA, Dec 1 (Reuters) - The Bank of Japan will consider the "pros and cons" of raising interest rates at its next policy meeting, Governor Kazuo Ueda said on Monday, giving the strongest signal yet of a hike later this month. The yen and bond yields rose after the remarks, which led markets to price in a roughly 80% chance of a rate hike at the December 18-19 meeting - compared with around 60% last week. Sign up here. In a speech to business leaders in the city of Nagoya, Ueda voiced confidence that Japan's economy will rebound from a contraction in the third quarter with the hit from U.S. tariffs proving smaller than initially feared. With tariff impact worries receding, the likelihood of the BOJ's economic and price projections being met is rising, Ueda said, signalling conditions for a hike were falling into place. "The BOJ is at the stage where it should examine whether firms' active wage-setting behaviour will continue," which is key to how soon it will raise the policy rate, Ueda said. Labour shortage is more acute, corporate profit remains high and the main business lobby has called on members to continue raising wages, he said. The BOJ was "actively collecting" data on the wage outlook ahead of its December policy meeting, he added. "We will examine and discuss economic and price developments at home and abroad, as well as market moves ... and consider the pros and cons of raising interest rates," Ueda said. The yen rose 0.4% to a session high of 155.49 per dollar after Ueda's remarks. The yield on the two-year Japanese government bond - the most sensitive to the BOJ's policy rate - rose 2 basis points to 1.01%, its highest since June 2008. "Ueda essentially pre-announced a December hike," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities. "With a December hike pretty much baked in, standing pat would cause huge market turbulence." NOT APPLYING THE BRAKES The BOJ exited a massive, decade-long stimulus programme last year and raised its policy rate to 0.5% in January on the view inflation was on the cusp of sustainably meeting its 2% target. While the bank has kept the rate steady since, a growing number of board members either proposed a hike, or called for doing so as stubbornly high food prices keep consumer inflation beyond 2% for well over three years. A Reuters poll last month showed a slim majority of economists expect a rate hike in December. All project an increase to 0.75% by March. With real interest rates deeply negative, another hike would still leave borrowing costs low and be tantamount to "easing off the accelerator" rather than "applying the brakes", Ueda said. "Being too late in adjusting the degree of monetary support could cause very high inflation and force us to respond rapidly, which would cause turmoil," Ueda told a news briefing after the speech. Ueda offered no clues on how high the BOJ could eventually raise rates. He said the BOJ will provide more information on how far the rate is from levels deemed neutral to the economy, once it raises the policy rate to 0.75%. The slow pace of hikes has been a factor behind a weakening yen, which has been a headache for government policymakers concerned about higher import costs stoking inflation. Asked about the yen on Monday, Ueda said the weakness is likely to accelerate consumer inflation - a factor to which the BOJ must be vigilant in setting policy. Renewed declines in the yen has raised the prospect of currency intervention, highlighting the administration's concern over the negative impact of the currency's fall. Sources have told Reuters the BOJ is preparing markets for a possible rate hike as soon as December, as worries about sharp yen falls return and political pressure to keep rates low fades. https://www.reuters.com/world/asia-pacific/boj-consider-pros-cons-rate-increase-december-meeting-ueda-says-2025-12-01/
2025-12-01 07:02
Silver hits all-time high of $58.83 per ounce Fed Chair Jerome Powell to speak later in the day Gold & silver in a strong sideways-to-uptrend, analyst says Dec 1 (Reuters) - Gold prices rose to a six-week high on Monday, supported by growing expectations of U.S. interest rate cuts and a sliding dollar, while silver struck a record high ahead of key U.S. economic data. Spot gold was up 0.3% at $4,241.27 per ounce, as of 1:44 p.m. ET (1844 GMT), its highest since October 21. U.S. gold futures for February delivery settled 0.5% higher to $4,274.80. Sign up here. Silver was up 3.8% to $58.57 per ounce, after hitting an all-time high of $58.83 earlier. The white metal has risen over 100% so far this year. The U.S. dollar slipped to a two-week low, making gold more affordable for holders of other currencies. "The underlying environment of expectations of further rate cuts, along with inflationary pressure still above the Fed target ... is still the underlying support in gold and silver," said David Meger, director of metals trading at High Ridge Futures. Traders have increased December rate-cut bets to an 87% probability, following softer U.S. economic data and dovish remarks from Fed officials, including Governor Christopher Waller and New York Fed President John Williams. FEDWATCH Lower interest rates tend to favor non-yielding assets such as gold. Investors are also focusing on key U.S. data this week, including November ADP employment figures on Wednesday and the delayed September Personal Consumption Expenditures (PCE) Index, the Fed's preferred inflation gauge, due Friday. Fed Chair Jerome Powell's remarks later on Monday are also expected to offer further policy clues. Meanwhile, the expectation that the next Fed Chair is going to be more dovish than previous ones is also supporting gold and silver, Meger said. White House economic adviser Kevin Hassett said on Sunday that, if chosen, he would be happy to serve as the next Fed chairman. Treasury Secretary Scott Bessent indicated a new chair could be named before Christmas. "We still view gold and silver in a strong sideways to higher uptrend," Meger said. Among other precious metals, platinum was down 0.7% to $1,660.69, while palladium fell 2.1% to $1,431.52. https://www.reuters.com/world/india/gold-climbs-six-week-high-risk-off-sentiment-equities-lower-dollar-2025-12-01/
2025-12-01 06:54
SEOUL, Dec 1 (Reuters) - The chief of South Korea's financial market watchdog said on Monday authorities would review protection measures for retail investors regarding foreign exchange risks amid persistent weakness in the won currency. "From the perspective of consumer protection, we will review whether the matters related to hedging foreign exchange risks for overseas investments are being fully explained by financial firms," Lee Chan-jin, the governor of the Financial Supervisory Service, told a press conference. Sign up here. Lee was speaking on an earlier government announcement that authorities would conduct inspections on protection measures for retail investors, adding that they do not plan to regulate overseas stock investments. The won has weakened more than 4% against the dollar so far this quarter, which the country's central bank last week attributed to increasing overseas investments by residents and sales of domestic stocks by foreigners. There is no sign of risks for financial firms in terms of foreign exchange exposure, Lee said. "On the contrary, some insurance firms are making profit," he said. Regarding ongoing investigations into private equity firm MBK Partners over its sale of troubled supermarket chain Homeplus and media reports of potential heavy sanctions, Lee said a decision would be made this month. MBK, in response to a request for comment, said: "MBK Partners has been doing its best to protect investor interests, according to relevant laws and articles of association." It said it would give a full explanation in any future proceedings with the regulator. Lee also said authorities, who are also investigating local banks over their sales of equity-linked derivatives, would take into account their efforts to compensate investor losses. Recent data leaks at financial firms and other South Korean companies, including cryptocurrency exchange Upbit, Lotte Card and e-commerce retailer Coupang (CPNG.N) , opens new tab, raise the need for stronger regulations, Lee said, criticising companies for being negligent in their data security. https://www.reuters.com/sustainability/boards-policy-regulation/south-korea-market-watchdog-wary-fx-risks-retail-investors-2025-12-01/
2025-12-01 06:49
JAKARTA, Dec 1 (Reuters) - Indonesia posted a smaller-than-expected trade surplus in October after exports unexpectedly fell, official data showed on Monday, amid curtailed demand from China and weak shipments of mining products. The surplus stood at $2.4 billion, smaller than the $3.72 billion forecast by economists polled by Reuters and September's $4.34 billion surplus. It was the smallest monthly surplus since April, according to LSEG data. Sign up here. Exports dropped 2.31% from a year earlier to $24.24 billion. Analysts had predicted 3.38% growth. The decline was due to lower shipments of coal and copper products, a Statistics Indonesia official told reporters. The contraction stems from weaker demand from China, amid a softening economy and ongoing normalisation of trade with the United States following a tit-for-tat escalation in tariffs earlier this year, said Permata Bank economist Faisal Rachman. Indonesian exporters had front-loaded their shipments to the U.S. ahead of the onset of tariffs in August. Meanwhile, the country's biggest copper producer, Freeport Indonesia, experienced a fatal mud-flow disaster at its Grasberg complex in September, which forced the company to temporarily halt production. It has since resumed operation at its two smaller mines in Grasberg, but it lowered its production targets for 2025 and 2026 due to ongoing recovery work at the complex. Southeast Asia's biggest economy has enjoyed a relatively large trade surplus almost every month in 2025, supported by higher shipments of palm oil, gold and jewellery - and even as prices of its top commodities, coal and nickel, remain weak. Imports contracted by 1.15% to $21.84 billion in October amid lower demand for consumer goods and raw materials, although that was less than the forecast fall of 2.2% in the Reuters poll. Separately, Indonesia's annual inflation rate slowed to 2.72% in November, slightly less than analysts' median forecast of 2.77% and comfortably within the central bank's 1.5% to 3.5% target range, data showed on Monday. The inflation rate stood at 2.86% in October. Core inflation, which excludes government-controlled prices and volatile food items, was steady at 2.36% in November. https://www.reuters.com/world/asia-pacific/indonesias-october-trade-surplus-smaller-than-expected-2025-12-01/
2025-12-01 06:44
MUMBAI, Dec 1 (Reuters) - The Indian rupee fell to a record low on Monday as sluggish trade and portfolio flows, coupled with the lack of a U.S.-India trade deal, overshadowed the impact of stellar economic growth. The rupee declined to 89.7575 against the U.S. dollar, dipping past its previous record low of 89.49 hit about two weeks ago. Sign up here. The drop came right after India posted a blowout GDP number that exceeded all expectations. The economy expanded 8.2% in the September quarter. The rupee ranks among Asia's worst-performing currencies this year despite resilience in domestic economic fundamentals which have boosted shares to record highs. The losses on the rupee would have been larger if not for the regular intervention from the central bank, traders say. Bankers said the robust growth has offered little respite to the currency, which remains pressured by the lack of progress on a U.S.-India trade deal, importer hedging activity, and a balance of payments position that has turned less supportive. The maturity of positions in the non-deliverable forwards market also hurt the rupee, traders said, while state-run banks were spotted offering dollars intermittently. A "calibrated" rupee depreciation is "both inevitable and desirable" in the current macroeconomic environment, economists at J.P. Morgan said in a note. The longer there is no trade deal, the greater the onus on rupee depreciation would be to provide that offset, the economists said. Comments from U.S. and Indian officials last month had raised hopes that the steep 50% tariffs on Indian exports would soon be reduced, but a deal has not been finalised. The U.S. tariffs have dented trade and portfolio flows into Indian equities, leaving the currency reliant on central bank interventions for support. Foreign investors have net pulled out over $16 billion from Indian shares over the year so far. India's merchandise trade deficit hit an all-time high in October. The rupee's rough patch has brought down its 40-currency real effective exchange rate, a measure of competitiveness, to undervaluation territory. At the end of October, the measure stood at 97.47, per central bank data. A level below 100 signals that a currency is undervalued relative to those of its trading partners. Last month, the International Monetary Fund reclassified India's foreign exchange framework as a "crawl-like arrangement", noting that "while the exchange rate has exhibited increasing two-way movement this year, there remains room for additional exchange rate flexibility." https://www.reuters.com/world/india/rupee-record-low-weak-flows-stalled-trade-deal-eclipse-blowout-growth-2025-12-01/
2025-12-01 06:44
Wall Street stocks finish lower after five straight days of gains Brent crude settles up more than 1% Benchmark 10-year yields rise Gold hits six-week high NEW YORK, Dec 1 (Reuters) - Global shares fell and U.S. Treasury yields rose on Monday as investors took a breather following five straight sessions of gains and ahead of key economic data that could support bets on Federal Reserve interest rate cuts. Equities on Wall Street finished lower, with utilities, healthcare and industrial stocks leading losses. Energy stocks were the top gainers as Brent crude prices settled up more than 1%. Sign up here. The Dow Jones Industrial Average (.DJI) , opens new tab fell 0.90%, the S&P 500 (.SPX) , opens new tab slipped 0.53%, and the Nasdaq Composite (.IXIC) , opens new tab dropped 0.38%. All three indexes had finished higher in the prior five trading days. European stocks slipped, with a drop in defense stocks helping fuel weakness. The pan-European STOXX 600 (.STOXX) , opens new tab index fell 0.20%. The MSCI World Equity Index was down 0.40% on the day (.MIWD00000PUS) , opens new tab following five consecutive sessions of gains. "The bull argument, both technically and fundamentally, is as strong as it has been in some time, while the bears are reliant on AI and valuation scepticism," said Nationwide Chief Market Strategist Mark Hackett. U.S. Treasury yields rose across the board. The yield on benchmark U.S. 10-year notes rose 7.3 basis points to 4.092%. The 2-year note yield, which typically moves in step with Fed rate expectations, rose 4.3 basis points to 3.535%. "The modest pullback today would not be unexpected, but it's more of a pressure release valve following the rally than a sign of stress," Hackett added. Data on Monday showed U.S. manufacturing contracted for the ninth straight month in November as the drag from import tariffs persisted. Other economic data including the closely watched Personal Consumption Expenditures Price Index are due later this week. The Fed will hold its next policy meeting on December 9 and 10. Bank of Japan Governor Kazuo Ueda said , opens new tab the central bank will consider the "pros and cons" of raising rates at its next policy meeting, causing traders to sharply increase their rate-hike bets. The Japanese yen strengthened 0.47% against the greenback to 155.45 per dollar. The euro was up 0.13% at $1.161. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.04% to 99.40. Bitcoin , opens new tab was down 5.49% at $86,172.03 , extending losses and putting bitcoin-buying companies under pressure. Gold , opens new tab hit its highest level in six weeks, driven by expectations of U.S. rate cuts, and was last at $4,239.69 , up 0.22%. "The rate cut expectations have jumped up significantly in the past couple of weeks, although much of it is priced for next week," said Wasif Latif, chief investment officer at Samarya Partners. "Today's drop could be a combination of a deleveraging from crypto and risk assets tied to the facts that the rate cuts are priced and people are taking some profits." https://www.reuters.com/world/china/global-markets-global-markets-2025-12-01/
