BOJ to Monitor Climate Change Impact on Inflation.

The Bank of Japan (BOJ) is committed to maintaining its 2% inflation target, even in the face of potential long-term shocks caused by climate change. Governor Kazuo Ueda articulated this objective while emphasizing the necessity for rigorous monitoring of the economic consequences of climate change and government initiatives promoting a green transition. Ueda stated that while the BOJ is committed to maintaining the current inflation target, the potential for shocks raises concerns about inflation expectations. He also discussed the potential for Japan to introduce a carbon tax in the future, which could impact inflation expectations. Furthermore, government subsidies aimed at promoting the green transition could result in short-term inflationary pressures. However, Ueda believes that Japan can accommodate such inflationary forces for the time being, as underlying inflation remains below 2%. The government's green transition strategy also plays a role in these considerations.

Bank of Japan Berharap Pertahankan Target Inflasi 2% di Tengah Risiko Perubahan Iklim

Economic Data Releases Could Trigger Market Volatility in Asia.

Next week, market sentiment in Asia, particularly in Indonesia, the United States, and China, will be influenced by various economic data releases. In Indonesia, the release of the Consumer Confidence Index data on Monday is likely to have an impact on market sentiment. Should the result exceed expectations, it could provide a positive outlook for the domestic economy, indicating consumer confidence in economic stability despite global volatility. Meanwhile, China will announce vehicle sales data on the same day. Should this show an annual contraction lower than expected, it could imply weak domestic demand and trigger negative sentiment. This is significant as China is aiming to boost domestic consumption to balance economic growth. Additionally, on Tuesday, Indonesia's Annual Retail Sales data will be released. An increase in this data would signal positive consumer spending prospects and provide hope for domestic demand.

Ekonomi Indonesia & Asia Dibayangi Sentimen dari 2 Raksasa Dunia

China's Slowdown Raises Concerns for Global Growth.

China's consumer inflation rate remained relatively stable in October, while prices at the factory level continued to decline. This suggests that the government's recent economic stimulus measures have not been sufficient to counteract the threat of deflation in the economy. The consumer price index (CPI) increased by a mere 0.3% year-on-year, slightly below the forecasts of economists. Core inflation, which excludes food and fuel prices, increased by 0.2%. Conversely, producer inflation has continued to decline, marking the 25th consecutive month of decrease with an annual decline of 2.9%. The data indicates that domestic demand in China remains low despite efforts to stimulate the economy through interest rate cuts, increased bank lending, and support for the stock and property markets. Economists and industry experts anticipate that the full impact of these stimulus measures will take time to be felt in terms of boosting domestic demand.

Dampak Stimulus Belum Terasa, Inflasi China Melambat pada Oktober 2024