Bloomberg Daybreak: Asia Edition Investors Look Ahead to Fed Decision, Japan Data Impact on BOJ
5 snips
Dec 8, 2025 
Mark Matthews, Head of Asia Research at Julius Baer, delves into the anticipated Federal Reserve rate cut and its repercussions on Asian markets, particularly the yen and BOJ policy. He emphasizes the significance of Australia’s rate adjustments and suggests investment opportunities in corporate bonds. Brian Fowler, a Bloomberg journalist, sheds light on Japan's recent economic data, linking stronger wage growth to potential rate hikes by the BOJ, while addressing concerns over GDP shrinkage and the government's new stimulus package.
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Fed Cuts But Watch The Dissent
- There are several FOMC members worried about inflation, so the tone and number of dissenters matter more than the cut size.
- Mark Matthews expects quarter-point cuts in Nov, Jan, and March and will watch Powell's Q&A for guidance on future path.
BOJ Hikes Won't Skyrocket The Yen
- A BOJ hiking cycle is needed for sizable yen appreciation and balance-sheet moves can tighten policy.
- Matthews sees a Dec hike and another in June taking policy to 0.75%, still leaving real rates negative versus 3% inflation.
Consider Aussie Corporate Bonds
- Watch the RBA because Australian investment-grade corporate bonds offer higher yields than U.S. peers and can be attractive.
- Matthews recommends considering Aussie corporate bonds given stable domestic demand and higher yields.