Bloomberg Daybreak: Asia Edition Traders Await Fed Chair Powell's Speech at Jackson Hole
Aug 18, 2025
Paul Dobson, Executive Editor for Asia Markets at Bloomberg, and Skyler Weinand, Founder and Chief Investment Officer at Regan Capital, delve into the pivotal economic gathering in Jackson Hole. They discuss the potential rise of the yen following US Treasury intervention and the implications for Japan's monetary policy. The duo highlights Fed Chair Jerome Powell's anticipated dovish stance, likely to signal sooner rate cuts. Market reactions are examined, reflecting investor caution amid evolving global financial dynamics.
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Diverging Fed And BOJ Paths Support Yen
- Markets expect the Fed to cut rates starting in September while the BOJ may raise rates, narrowing the rate differential and supporting the yen.
- Traders will actively price and trade the yen around signals from both central banks ahead of Jackson Hole.
Japan's GDP Gives BOJ Political Cover
- Strong Japanese GDP and rising inflation increase the chance of a BOJ rate hike possibly as soon as October.
- Political easing around Prime Minister Kishida gives the BOJ more room to move without provoking backlash.
China Prefers Targeted Support Over Big Stimulus
- China will likely continue measured stimulus rather than aggressive easing despite weaker data, aiming to hit its ~5% growth target.
- Policy options include RRR cuts and liquidity injections while avoiding large-scale stimulus for now.