■ Based on the slowing growth of consumer price index and the tight supply and demand of labour market, the interest rate increase will be reduced to 25bps
■ Whether the interest rate increase cycle is about to end, the statement at the meeting on the 25th is more concerned than ever
Canada's consumer price index (CPI) rose 6.3% in December from the previous year. Although food prices remained high, it hit the lowest level since February last year due to the impact of the decline in gasoline prices. The median and revised CPI as a clue to monetary policy also slowed to 5.2% compared with the previous month (5.3%). From the employment situation, the average hourly wage (regular employees) of the month increased by 5.2% month-on-month. Although the increase slowed by 0.2 percentage points compared with the previous month, it was still at a high level. The unemployment rate has improved to 5.0%, and the labour participation rate has risen to 65.0%. The tension between supply and demand in the labour market continues.
The Bank of China gradually reduced the rate increase after reaching the peak (100 basis points) in July last year. In the statement after the meeting on December 7 last year, the Bank of Japan said that it would "consider whether it is necessary to raise interest rates further", suggesting that the pace of interest rate increase might be slowed down in future policy management or consider when to suspend interest rate increase. He pointed out that "the financial contraction is increasing as evidence of domestic demand restraint", and expressed concern about the slowdown in personal consumption and housing investment. Although the central bank is likely to decide to raise interest rates for the eighth consecutive time at the monetary policy meeting on the 25th, it is expected that the rate increase will be reduced to 25bps (50bps) compared with last December, and the policy interest rate will be 4.5%. On the other hand, at the meeting on March 8, more than 60% of the Bank of Japan expected to maintain the policy interest rate unchanged.
