On Monday, the People's Bank of China maintained its Loan Prime Rates (LPR) at 3.45%. The LPR functions as a benchmark rate for Chinese banks in setting interest rates for loans extended to their clients. This decision could potentially influence the Australian market, given the close trade relationship between the two countries.
The Chinese Ministry of Commerce has announced a new tariff on US goods. Specifically, China has imposed a duty of 43.5% on imports of propionic acid from the United States. This chemical is extensively utilized in various sectors including food, feed, pesticides, and medical applications.
Japan’s National CPI, excluding fresh food but including fuel costs, increased 2.6% year-over-year in February, decelerating from a four-month high of 2.8% in January and falling below forecasts of 2.7%. The slowdown was attributed to mild increases in food prices, although it remained above the Bank of Japan’s 2% target due to the weakness of the Yen and high commodity prices.
On Thursday, Bank of Japan board member Asahi Noguchi stated that the pace of future rate hikes would probably be much slower than that of its global counterparts in recent policy tightening. This is because the impact of rising domestic wages has yet to be fully transmitted to prices, as reported by Reuters.
Analysts at Rabobank suggested that stronger Japanese economic data, coupled with stronger expectations that the Bank of Japan (BoJ) may raise rates again later this year, would likely provide the Japanese Yen (JPY) with broad-based strength. They posit that if Japanese real household incomes turn positive later this year, there is a possibility of another BoJ rate hike.
According to a Westpac report, while the central bank signaled that rates are unlikely to be raised further, greater confidence in the inflation outlook is required before contemplating the possibility of rate cuts.

Daily Digest Market Movers: AUD/JPY appreciates on risk-on sentiment