The Day at a Glance | June 18 2021

The Top

*The Chinese Ministry of Trade suggests the US eliminate tariffs imposed during the Trump administration to reduce inflationary risks.

*The Bank of Japan maintains monetary stimuli without changes; it announced an initiative to facilitate credit for private companies that lead the fight against climate change.

*Europe withdraws travel restrictions on the United States so Americans can enter the region without limitations.

*Russia and the United Kingdom are recording an important acceleration in infections due to a new variant of the virus.

Economic environment

The Bank of Japan maintains stimuli. In its monetary policy meeting carried out last night, the Central Bank of Japan decided to maintain the interest rate unchanged and it extended aid for businesses affected by the pandemic. The bank`s members are expected to maintain an ultra-accommodative stance in the foreseeable future since, and contrary to other countries, Japan doesn’t face inflationary pressures. Prices barely recorded growth in May (0.1% annual) after recording contractions since March of 2020. This, despite strong increases in gasoline prices. The Bank of Japan remains far from reaching its inflationary objective and is still far from having discussions about the withdrawal of stimuli – which are a big concern in the US Federal Reserve, the Bank of Canada and Australia. In addition to the Bank of Japan`s decision, it presented a proposal to facilitate credit for private companies in order to boost the transition towards clean energy. Haruhiko Kuroda, Governor of the Bank of Japan, assured that the measure seeks to advance economic stability in the long term, and indirectly, back the stability in prices and growth. This movement that seeks to fight climate change is not new among central banks: The Bank of England announced that it would purchase bonds from companies that are fighting climate change, while the ECB has stated that one of its main objectives will be to purchase green bonds.