Global Morning Briefing is a roundup of international news compiled by The Seoul Economic Daily.
Japan's Policy Rate Hits 31-Year High as Ueda Signals Slower Pace Ahead
The Bank of Japan raised its policy rate again just three months after its last increase, lifting it to the highest level in 31 years. The central bank judged that upward pressure on prices could build as the yen stays weak on the U.S.-Japan rate gap, oil prices climb on the war in the Middle East and artificial intelligence investment adds to demand. Governor Kazuo Ueda said the bank would "continue to raise the policy rate," but also signaled a slower pace, noting that "raising rates too quickly increases market volatility." Market participants said the message was not hawkish enough.
At its monetary policy meeting on the 18th, the BOJ decided to raise its target for the uncollateralized overnight call rate by 25 basis points, to around 1.25% from around 1.0%. That is the highest level since 1995, a span of 31 years.
The increase came only three months after the June meeting. Since ending its negative interest rate policy in March 2024, the BOJ had generally raised rates about once every six months. This time it shortened the interval.
Behind the faster pace is the central bank's wariness about prices. Oil prices are rising again as the U.S. and Iran resume hostilities, while expanding global AI demand and the yen's steep depreciation in the currency market are also pushing up import prices, according to the assessment.
At a news conference, Ueda confirmed the bank's stance of continuing to raise rates in order to achieve its 2% inflation target in a stable manner.
"Until now, the short-term focus of policy has been on lifting underlying inflation, which had been below 2%," he said. "Underlying inflation is now approaching 2%." He added: "What matters is stabilizing underlying inflation at around 2%. The phase of our policy has changed."
In Tokyo currency trading that day, the yen weakened to the 157 range against the dollar.
Bloomberg said Ueda delivered both hawkish and dovish signals, but that the currency market was not taking his remarks as sufficiently hawkish at this point.
Money Flows Into Stocks and Funds in Japan, Passing Insurance and Pensions for First Time
Japanese households' holdings of stocks and investment trusts have exceeded their insurance and pension assets for the first time.
The Nihon Keizai Shimbun reported on the 18th, citing flow-of-funds statistics for the fiscal year released by the BOJ the previous day, that holdings of stocks and investment trusts stood at 590 trillion yen as of the end of March, overtaking insurance and pensions at 579 trillion yen. It is the first time the two have switched places since March 2005, the earliest period for which data are available.
As of the end of June, Japanese households held 2,519 trillion yen in financial assets, up 11% from a year earlier. Of that, holdings of stocks and investment trusts came to 678.9608 trillion yen, a 44% increase from a year earlier. Cash and deposits stood at 1,131 trillion yen, up just 0.5% over the same period.
Iran's President Heads to New York as Trump Says He Will Decide on Strikes
Iran's president and the leaders of six Middle Eastern countries are expected to converge on New York next week for the United Nations General Assembly. U.S. President Donald Trump said he is at a major crossroads over whether to resume large-scale attacks on Iran, making next week's gathering in New York the biggest turning point yet in the conflict with Tehran.
A U.S. State Department spokesperson said entry visas had been approved for Iran's "core delegation" and its accompanying staff. An unnamed U.S. government official said the delegation includes President Masoud Pezeshkian and Foreign Minister Abbas Araghchi.
Trump will hold a summit in New York on the 22nd with six Gulf states: Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman.
In an interview with Axios, Trump said he wanted to know where the six Gulf states stand and how the situation looks, adding that the U.S. has protected them a great deal.
Axios said the meeting could play an important role in determining the next stage of the war, including whether the U.S. makes further efforts at a diplomatic settlement with Iran or steps up military action, and noted that Trump would need the consent of regional allies to resume large-scale combat operations.
Two Days After Clarity Act Stalls, U.S. SEC Eases Rules on Tokenized Stocks
The U.S. Securities and Exchange Commission is sharply easing rules on tokenized stocks to make it simpler to buy and sell listed shares in the form of digital assets. The move, a temporary alternative, comes just two days after the Clarity Act, which would define the legal nature of digital assets, failed to pass Congress. The easing will allow U.S. stocks to be traded in small fractions around the clock, 365 days a year.
According to The Wall Street Journal, the SEC said it would grant a five-year exemption from rules that had applied to tokenized stock trading venues on the same basis as ordinary securities exchanges, provided they meet certain conditions. The industry expects Coinbase and Robinhood to qualify as liquidity providers and thus fall within the scope of the exemption. Both already distribute tokenized stocks overseas, including in Europe.
The SEC will apply the easing only to tokenized stocks that carry the same shareholder rights as ordinary shares, including dividends, voting rights and ownership. The scope covers not only tokenized stocks issued by listed companies themselves but also those issued by third parties, which are expected to become the mainstream form.
Tokenized stocks are securities that move the ownership and shareholder rights of listed shares onto blockchain tokens. Because they run on blockchain systems, they can be traded without regard to market hours and settled faster than on existing exchanges.
Jensen Huang Says Nvidia Will Double Chip Sales Volume Next Year
Nvidia Chief Executive Jensen Huang set a goal of selling twice as many chips next year as this year, on the back of expanding artificial intelligence investment.
Speaking to reporters at the Scotland AI Summit, hosted by King Charles III at Dumfries House in Cumnock, Scotland, Huang said he expected to sell twice as many chips next year as this year. "AI is making a very large contribution to many industries and economies," he said. "In almost every country we have entered, people want to invest in AI."
The "double" Huang referred to is based on the number of semiconductors sold, not revenue. Huang said last October that the company had shipped 6 million Blackwell graphics processing units up to that point.
