The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0218 GMT - The South Korean and Taiwanese economies are likely to face a stagflationary hit from higher energy prices, Barclays economists say in a report. The Middle East conflict is expected to boost inflation by 50 to 60 bps in Korea and Taiwan despite some mitigating measures taken by their governments. That is also likely to drag growth, hitting consumption of lower income households especially hard, Barclays says. Higher transportation costs, headwinds seen in the energy and petrochemical industries as well as potential disruptions to power generation could also be quite painful for Taiwan and Korea, the bank says.(amanda.lee@wsj.com)
0137 GMT - Indonesia and the Philippines are unlikely to deliver further policy easing, say Barclays' economists in a report. The Indonesian rupiah is expected to be under pressure from a stronger dollar amid the Middle East conflict. This is likely to prevent Bank Indonesia from cutting rates on Tuesday and in June and December, according to Barclays' base case. Bangko Sentral ng Pilipinas is also expected to be wary of cutting interest rates further, given inflation concerns. Barclays reckons that a rate hike by the BSP is also unlikely with consumer inflation expected to remain below 4% this year, even with Brent crude at $100 a barrel.(amanda.lee@wsj.com)
0127 GMT - Japan's February trade data is likely to show a sharp slowdown in export growth after a strong print in January, DBS's economics team says. It projects a 1.7% rise on year, after a 16.8% surge the prior month. Imports likely remain relatively stable, resulting in a weak trade balance. DBS warns that Middle East tensions pose headwinds for Japan's trade balance, given its high reliance on fuel imports and significant dependence on the region for crude. That could help explain the yen's weakness over the past weeks since the Middle East crisis began, which stands in contrast with its traditional role as a safe-haven currency. The trade data are due Wednesday. (fabiana.negrinochoa@wsj.com)
0118 GMT - Taiwan's central bank is expected to keep the policy rate unchanged at 2.00% on Thursday while raising GDP and inflation forecasts, DBS's economics team says. Given the strong momentum in January-February on the back of AI-related exports and investment demand, the central bank could revise its 2026 GDP growth forecast to around 7% from 3.7% previously. Inflation projections, meanwhile, could be nudged up to around 2% from 1.6% to capture the uncertainty around global oil prices and potential passthrough to import costs, DBS says. "While it remains premature to expect rate hikes this year, the growth-inflation dynamics suggest that the next policy move is more likely to be a rate hike rather than a rate cut." (fabiana.negrinochoa@wsj.com)
0116 GMT - The Bank of Japan will likely keep its policy rate unchanged at 0.75% this week, DBS's economics team says. Strong wage data and stable underlying inflation in January-February suggest that reflation dynamics remain on track, supporting monetary policy normalization, the economists say. However, the BOJ may prefer to wait for the outcome of this spring's Shunto wage negotiations to confirm the sustainability of reflation. A moderate increase in oil prices, combined with a weaker yen, could add to the case for the BOJ to continue raising rates. A sharp oil price shock, on the other hand, could create stagflation risks and delay the timing of further tightening, DBS says. It doesn't view an April rate hike as a done deal, seeing June-July as offering a more appropriate window. (fabiana.negrinochoa@wsj.com)
0116 GMT - Bank Indonesia is likely to extend its pause on rates this month, in a bid to keep currency weakness in check as it monitors Middle East tensions, DBS's economics team says. An extended conflict could introduce inflationary pressures via retail fuel prices, industrial raw materials, transportation and derivative products. As it stands, inflation jumped to 4.8% on the year in February due to the fading impact of one-off stimulus measures rolled out in 1Q 2025. Given the pipeline of inflationary pressures and desire to preserve policy space, Bank Indonesia is likely to keep benchmark rates unchanged on Tuesday. (fabiana.negrinochoa@wsj.com)
0052 GMT - Indonesia's domestic consumption outlook faces significant external headwinds, UOB Kay Hian analyst Suryaputra Wijaksana writes in a note. The Middle East conflict has introduced substantial volatility into the global commodity markets, affecting oil, food and metal prices. "The most significant risk to the domestic outlook is a potential administered fuel price adjustment," the analyst says. The Indonesian government might be prompted to raise subsidized fuel prices, if global oil prices remain high. Production costs could also pick up due to potential supply chain disruptions, which may be passed on to end-consumers and affect their purchasing power in the coming quarters.(amanda.lee@wsj.com)
0045 GMT - The Bank of Japan is expected to stand pat on rates this week and likely hike to 1% around midyear, says Moody's Analytics in a note. "Conflict in the Middle East raises the risk that inflation will reaccelerate, but the uncertainty that the conflict creates will keep the BOJ on hold," it says. Fresh yen weakness could push the BOJ to bring forward a rate hike later this year, it says. However, softening wage growth and stuttering real economic data make it hard to justify an aggressive hiking schedule beyond 1%, it adds. The BOJ rate decision is due Thursday. (monica.gupta@wsj.com)
0042 GMT - The yen is mixed against other G-10 and Asian currencies in early trade, but may weaken on the prospect that rising oil prices could worsen Japan's trade balance, analysts say. "Markets continue to focus on the terms of trade effects of the Iran war," CBA's Global Economic & Markets Research team says in a note. "We see a higher bar for a yen-buying intervention by Japan's Ministry of Finance given the rise in USD/JPY has been driven by fundamentals such as interest rate differentials and terms of trade adjustments," the team adds. The dollar is 0.2% lower at 159.32 yen after touching Y159.74 earlier this morning and last Friday, the highest intraday level since July 2024, according to LSEG data. (ronnie.harui@wsj.com)
0011 GMT - Japanese stocks are lower as concerns about a prolonged Middle East conflict and higher energy prices continue. Auto and electronics stocks are leading the declines. Nissan Motor is down 3.1% and Nidec Corp. is 2.8% lower. The dollar is at 159.49 yen, compared with Y159.40 as of Friday's Tokyo stock market close. Investors are closely watching developments in Iran and any Japanese government responses to the conflict. The Nikkei Stock Average is down 0.1% at 53762.40. (kosaku.narioka@wsj.com; @kosakunarioka)
0006 GMT - JGBs edge higher in yield terms in early Tokyo trade on growing inflation concerns driven by the Middle East conflict, which could prompt a faster pace of BOJ rate increases. The Bank of Japan's two-day meeting starting Wednesday will "serve as a critical litmus test for assessing the BOJ's appetite for an April hike," three members of J.P. Morgan's Global Markets Strategy say in a note. "Our economists think that the BOJ would not pre-commit to an April move while keeping the option open if conditions stabilize," the members add. The 10-year JGB yield is up 1 bp at 2.250%. (ronnie.harui@wsj.com) Corrections & AmplificationsThis headline was corrected at 0017 GMT to reflect that JGBs edged higher in yield terms in early Tokyo trade. The original headline incorrectly said JGBs edge higher in price terms in early Tokyo trade.
0003 GMT - Indonesia's fiscal challenges are likely to be compounded by the recent global energy shock, given that its public finances were deteriorating before the Middle East conflict, Capital Economics' Jason Tuvey writes in a note. The Indonesian government is planning to temper the impact on local fuel prices by boosting energy subsidies. "Officials have pledged fiscal tightening in other areas, but we're not convinced that it would do enough and it's looking increasingly likely that the fiscal rules will be suspended," Tuvey says. Such a move might further reinforce investors' concerns about President Prabowo Subianto's policy-making direction, he adds.(amanda.lee@wsj.com)
(END) Dow Jones Newswires
March 15, 2026 22:18 ET (02:18 GMT)
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