International News 03/05

May 03, 2024 No. 69

The US Federal Open Market Committee (FOMC) released a statement on 1 May 2024.

The latest economic data indicates a robust economic expansion, accompanied by a surge in employment and a decline in unemployment. However, despite a slight easing in inflation, it remains high and progress towards the inflation target of 2% has been limited. The Committee is dedicated to achieving maximum employment and 2% inflation in the long term, with a more balanced assessment of the risks compared to last year. The economic outlook remains uncertain, and inflation risks are a concern. In light of these considerations, the Committee has decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 per cent. Any adjustment to this range will be carefully considered based on recent data, the economic outlook, and the risk balance. The Committee does not anticipate reducing the target range until there is greater confidence in sustainable inflation towards 2%. Furthermore, the Committee will continue to reduce its holdings of Treasury and corporate debt securities and corporate mortgage-backed securities, but at a slower pace starting in June.


The Japanese government has taken action to support the value of the yen.

The Japanese yen appreciated against the US dollar, with the USD/JPY pair declining 1.57% to ¥155.84 on Monday. Market analysts believe that the yen's sudden strengthening was a result of intervention by Japanese authorities in order to support the currency. This follows the yen reaching its lowest point in 34 years at ¥160.24 per USD, prompting Japanese banks to sell US dollars in order to support the yen. There is now speculation among traders as to whether Japan will make another interest rate change in response to the high US interest rates. Analysts have indicated that if the USD/JPY pair moves back to 160, the Japanese Ministry of Finance may take further action. Please be advised that the Ministry of Finance is currently unavailable as it is on holiday.


Wilmar's first quarter profit has decreased by 14% compared to the same period last year.

Wilmar International, a food producer, has reported a 14% decline in net profit for the first quarter of this year. The company's core net profit during this period was $328.4 million, down from $381.9 million in the same period last year. The weak performance of the feed and industrial products segment was the primary reason for the decline, with sales volume growing by only 7% on an annual basis. The sugar trading division also experienced a decline in profit, and investments in China resulted in reduced profits from joint ventures and associates. In its official statement, Wilmar acknowledged the uncertain global economic outlook and anticipated challenging operating conditions throughout the year.