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Hello. Japan stepped in to strengthen the yen for the first time in 24 years as a trio of European central banks raised interest rates, underscoring the disruptive impact of inflation on currencies and monetary policy.
Rising inflation to multi-decade highs in much of the world has led to sharp increases in borrowing costs, with seesaw currency markets. This in turn has triggered what economists call a “reverse currency war” in which central banks seek to prop up their exchange rates against the dollar, through intervention or interest rate hikes.
The latest moves, which included rate hikes in the UK, Switzerland and Norway, came a day after the US Federal Reserve announced its third straight hike of 0.75 percentage points.
However, Turkey’s central bank took the opposite direction, continuing its unorthodox policy of cutting its one-week repo rate from 13% to 12% despite inflation surging past 80% last month. The lira fell to a record low against the dollar.
Stock and government bond prices fell on Thursday as more of the world’s central banks joined the US Federal Reserve in raising interest rates.
Go further: While Japanese officials may be increasingly nervous about a weak yen, its effects are much more nuanced today than in the past.
Do you think the Bank of Japan was right to intervene to strengthen the yen? Tell me what you think [email protected] or tap reply to this email. – Emily
Five other stories in the news
1. US senators press Apple for possible deal with Chinese chipmaker The Democratic chairman and Republican vice chairman of the Senate Intelligence Committee asked the intelligence community to consider the threat a potential deal between Apple and Chinese chipmaker Yangtze Memory Technologies Co poses to national security, in an escalation of political pressure on the iPhone maker.
2. Russian Lavrov trades barbs with Western officials Russian Foreign Minister Sergei Lavrov faced Western powers at the UN Security Council to defend the Russian invasion of Ukraine. Lavrov, who arrived late for the meeting and left after addressing the council for about 20 minutes, denied that Russia had committed war crimes and blamed Ukraine and its Western backers for the conflict.
Related Reading: Russia released a number of prisoners, including British and Americans, after the mediation of Saudi Crown Prince Mohammed bin Salman
3. Twelve people die as Iran suppresses protests The death of 22-year-old Mahsa Amini in police custody sparked the largest anti-regime protests since 2019. Of the 12 people killed in the protests, at least five were members of the security forces, officials said , as the authorities intervened. intensify their repression of the demonstrations.
4. DoJ cleared to resume review of Mar-a-Lago records A U.S. appeals court has authorized the Justice Department to continue investigating classified documents seized during the search of Donald Trump’s Mar-a-Lago residence, in a victory for judicial authorities in their arm of legal wrangling with the former president.
5. Credit Suisse plans to split the investment bank into three Credit Suisse has drawn up plans to split its investment bank into three and resurrect a “bad bank” for risky assets, as the Swiss lender tries to emerge from three years of scandals.
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The coming days
Inflation data for Malaysia August consumer price index data will be released today. Use our inflation tracker to see how your country compares to rising prices.
HSBC raises Hong Kong lending rate Homeowners and businesses in the financial hub, home to one of the world’s most expensive property markets, will face higher costs as the bank implements a raise today for the first time in four years .
UK mini budget New Chancellor Kwasi Kwarteng will present a mini-budget later today, with tax cuts at the center of a bid to boost economic growth to 2.5%.
General elections in Italy Italians will go to the polls following the resignation of Mario Draghi in July. If the polls are correct, Italy will emerge from its general election on Sunday with a new far-right government led by arch-conservative Giorgia Meloni, president of the Brotherhood of Italy.
On September 26, join our Technology and Policy Forum in partnership with ETNO to hear from CEOs, policy makers and industry investors in Brussels to map future policies and regulations in EU digital markets. Sign up here to join the conversation in person or online.
What else we read
Saudi Arabia and the United States are on the loose Joe Biden’s embarrassment of punching Mohammed bin Salman in July would have been worth it had he undermined Vladimir Putin’s Russia, says Edward Luce. No such results were visible, he said. Can the US President do anything to dissuade Saudi Arabia from being a recurring thorn in America’s side?
The airline industry is in trouble Is bottomless caviar the answer? Lobster thermidor, Michelin-starred chefs and recipes with non-disclosure agreements: discover the test kitchens of the world’s most experimental airlines.
Five things the tech bubble did right As tech entrepreneur Paul Graham wrote in a brilliant essay following the first dotcom crash, stock market investors were right about the direction of travel, even if they were wrong about the speed of travel. This idea is worth revisiting as investors watch the Nasdaq fall and examine the wreckage of special purpose acquisition companies.
Bitcoin cannot be separated from crypto Why do “bitcoin maximalists” claim that bitcoin is not a cryptocurrency? One can see why they might want to distance themselves from cryptoland scams. But their arguments do not hold water, writes Jemima Kelly.
Donations to Trump’s super Pac slow dramatically The Make America Great Again, Again! super Pac, which is the only active Trump-affiliated super Pac, raised just $40 in August, after raising $351,000 in July and zero in June. In April and May, the group had raised more than double that amount, with $864,000 in total contributions.
The six titles vying for FT’s 2022 Business Book of the Year award tackle “some of the toughest and most important issues facing global capitalism”, said FT editor Roula Khalaf. and president of the judges. Find out which titles have been shortlisted.
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