Japan Money Stock (Preliminary Figures for September 2025)

Members commenced their discussion of financial conditions by considering policy settings at other advanced economy central banks. The US Federal Reserve (Fed), the Bank of Canada and the Reserve Bank of New Zealand (RBNZ) had all reduced their policy rates further since the previous meeting, in large part because of softening labour markets. In the United States, the softening labour market had led the Fed to ease policy, notwithstanding some evidence of higher tariffs beginning to be passed through to consumer prices. Market participants anticipated that the Fed would ease policy further in 2026. Additional easing by the RBNZ was also anticipated. By contrast, expectations for the path of the policy rate in the United Kingdom, euro area and Japan had edged higher since the previous meeting. For the United Kingdom, this partly reflected growing concern about the persistence of inflation. Sovereign bond yields in the United States had declined since the previous meeting, reflecting growing market expectations for additional policy easing. However, the yield curve had also steepened. Members noted that there were few signs that this reflected investor concern about external pressure on the Fed. Most notably, measures of long-term inflation expectations and term premia had been stable, though members noted that the rapid rise in the gold price and a depreciation of the US dollar were perhaps indicative of some concern about the pressure on the Fed. Members also discussed the pronounced rise in 30-year bond yields in other countries, including the United Kingdom, Germany, France and Japan. These moves had occurred amid concerns about long-term public debt sustainability and political uncertainty about how those concerns might be addressed. Members noted that conditions in global corporate funding markets remained buoyant. Debt and equity funding were both readily available on favourable terms. Equity prices in many advanced economies had reached new highs. In part, that reflected strong US company earnings but equity ris RBA: some time before full impact of previous easing would be felt RBA: Labour market still a little tight, forward indicators steady RBA: monthly cpi readings housing, services suggest Q3 inflation could be above forecast