Philippine stocks bounced back Wednesday amid growing monetary easing expectations both here and abroad.
The Bangko Sentral ng Pilipinas , meanwhile, estimated that July inflation would settle within a range of 4.0 percent to 4.8 percent, higher than 3.7 percent in June. Meanwhile, the yen rallied against the dollar Wednesday after Bank of Japan hiked interest rates for the second time in 17 years, while equity markets climbed on growing hopes for a cut in US borrowing costs.
“While historically the BoJ have been known to disappoint, this time the policy changes have met the mark and should be seen as a show of confidence and a message that they see economics in a strong enough position to absorb a lift in the cost of capital,” said Chris Weston at Pepperstone Group.Many commentators had predicted the bank would stand pat this month, but Japan’s newly appointed top foreign exchange official said the benefits of a weaker yen were outweighed by the demerits.
However, Hiroshi Namioka at T&D Asset Management was less concerned, saying ahead of the announcement he thought BoJ boss Kazuo Ueda “wants to expand the scope for lowering policy rates for the future”.