• The Bank of Japan (BOJ) is expected to raise interest rates on Friday to levels unseen since the 2008 global financial crisis, as broad worldwide stocks rally calms policymakers' fears U.S. President Donald Trump's tariff threats could upend markets.
• With traders almost fully pricing in the chance of a rate hike, attention now shifts to any clues BOJ Governor Kazuo Ueda's post-meeting briefing could offer on the pace and timing of subsequent increases in borrowing costs. At the two-day meeting concluding on Friday, the BOJ is widely expected to raise its short-term policy rate from 0.25% to 0.5% - a level Japan has not seen in 17 years.
• The move would underscore the central bank's resolve to steadily push up interest rates near 1% -  a level analysts see as neither cooling nor overheating Japan's economy. "Market hasn't shown much negative reaction to Trump's comments, so the BOJ will probably proceed with a rate hike," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.
• A hike by the BOJ would be the first since July last year when the move, coupled with weak U.S. jobs data, shocked traders and triggered a rout in global markets in early August. Keen to avoid a recurrence, the BOJ prepared markets with strong signals from Ueda and his deputy last week that a rate hike was on the cards. The remarks caused the yen to rebound as markets priced in a roughly 90% chance of a rate increase.
• In a quarterly outlook report due after the meeting, the board is expected to raise its price forecasts on growing prospects that broadening wage gains will keep Japan on track to sustainably hit the bank's 2% inflation target. Many analysts already expect the central bank to hike rates again later this year, barring a Trump-induced market shock that hits global growth and Japan's fragile economic recovery.
• Since taking the helm in April 2023, Ueda dismantled his predecessor's radical stimulus programme in March last year and pushed up short-term interest rates to 0.25% in July. BOJ policymakers have repeatedly said the bank will keep raising rate, if Japan makes progress in achieving a cycle in which rising inflation boosts wages and lifts consumption - thereby allowing firms to continue passing on higher costs.

(Source: Reuters)

• An exchange programme is among areas of cooperation being put forward to improve human resources in the public healthcare sector, between the Governments of Jamaica and the Republic of the Philippines.
• Discussions are in progress as the Ministry of Health and Wellness hosts the visit of the Secretary of Health for the Republic of the Philippines, Dr. Teodoro J. Herbosa, from January 20 to 23.
• It is expected that the countries will sign a Memorandum of Understanding (MOU) for human resource training and other technical support for cooperation and exchange between the countries.
• Speaking with journalists, Chief Medical Officer (CMO) in the Ministry of Health and Wellness, Dr. Jacquiline Bisasor-McKenzie, said the bilateral agreement should prove to be mutually beneficial. A delegation from the Ministry recently visited the Philippines to conduct a review of the country’s public health framework.
• “I think the exchanges that we are looking at [will focus on] physicians and nurses. When we were in the Philippines, we visited a lot of their specialist hospitals and what we found was that they certainly have the numbers to give exposure to a lot of procedures. ”Dr. Bisasor-McKenzie said, noting that the Philippines boasts a strong nurse training programme.
• In terms of what Jamaica can contribute under the exchange programme, Dr. Bisasor-McKenzie pointed to the country’s very high rate of immunisation, its community mental health programme, and its well- known ‘Jamaica Moves’ public education campaign that promotes a healthy lifestyle to reduce non-communicable diseases (NCDs).

(Source: JIS)

• Amid the growing concern about foreign exchange constraints in the country, the Trinidad and Tobago Manufacturers' Association (TTMA) is hoping the ongoing trade mission to Dominica will help the situation.
• TTMA Chief Executive Officer Mahindra Ramdeen said he hopes the four-day mission would benefit emerging businesses and the association views Dominica as a distinctive opportunity for both T&T and the Dominican economy.
• T&T's delegation to Dominica – spearheaded by Trade Minister Paula Gopee-Scoon – consists of 29 participants, including 19 companies across the food and beverage, construction, printing and packing, chemical and household, construction and services sectors.
• During the four-day mission, Minister Gopee-Scoon will meet with the Ministry of Foreign Affairs, International Business, Trade and Energy, the Ministry of Agriculture, Fisheries, Blue and Green Economy, the Dominica Association of Industry and Commerce, and the Dominica Manufacturers Association.
• The initiative is part of Trinidad and Tobago’s Export Booster Initiative or EBI, a strategic effort designed to increase the value of the country’s non-energy exports over the next three years.

(Source: Trinidad and Tobago Guardian)

• Bahamas’ external reserves decline slowed significantly in November, dropping by $0.4Mn compared to a sharp $30.6Mn reduction in the same period in 2023, according to the Central Bank, reflecting a notable year-over-year reversal in foreign currency transactions.
• In its monthly Economic and Financial Developments report for November 2024, the regulator noted that the decline in external reserves moderated considerably, primarily due to net foreign currency inflows from the private sector, which helped offset net public sector outflows.
• Regarding the broader economy, the Central Bank noted that in November, the domestic economy sustained its growth momentum, although at a more tempered pace compared to the previous year.
• The tourism sector showed continued expansion, though more slowly, with strong growth in the cruise segment offset by capacity constraints in the high-value-added stopover component.
• On price developments, average consumer price inflation – as measured by the Retail Price Index (RPI) for The Bahamas – slowed during the 12 months to September 2024, relative to the same period in 2023, reflecting a moderation in price pressures for imported fuel and other goods and services.

(Source: Eyewitness News)

• S. President Donald Trump vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the U.S. via Mexico and Canada.
• Trump voiced his latest tariff threats in remarks to reporters at the White House a day after taking office without immediately imposing tariffs as he had promised during his campaign. Financial markets and trade groups exhaled briefly on Tuesday, but his latest comments underscored Trump's longstanding desire for broader duties and a new Feb. 1 deadline for 25% tariffs against Canada and Mexico, as well as duties on China and the EU.
• Trump said the EU and other countries also had troubling trade surpluses with the United States. "The European Union is very, very bad to us," he said, repeating comments made Monday. "So, they're going to be in for tariffs. It's the only way ... you're going to get fairness."
• Trump said on Monday that he was considering imposing duties on Canada and Mexico unless they clamped down on the trafficking of illegal migrants and fentanyl, including precursor chemicals from China, across their U.S. borders.
• China said it was willing to maintain communication with the U.S. to "properly handle differences and expand mutually beneficial cooperation". It sought to promote stable and sustainable ties with the U.S., the foreign ministry said.
• "We always believe that there is no winner in a trade war or tariff war. China will always firmly safeguard its national interests," ministry spokesperson Mao Ning told reporters at a regular press briefing on Wednesday. White House trade adviser Peter Navarro told CNBC that Trump's Canada and Mexico tariff threat was to pressure the two countries to stop illegal migrants and illicit drugs from entering the U.S.

Source: (Reuters)

• Britain experienced a bigger-than-expected budget deficit in December, swelled by debt interest costs and a one-off purchase of military homes, according to official data that underlined the fiscal pressure faced by finance minister Rachel Reeves.
• Public sector net borrowing was 17.8Bn pounds ($22Bn) in December, more than 10.0Bn pounds higher than a year earlier, the Office for National Statistics said on Wednesday. Economists polled by Reuters had a median forecast of 14.1Bn pounds for headline public sector net borrowing.
• Since the Oct. 30 budget that raised borrowing and increased tax on employers to help restore public services and investment, economic and financial data has largely turned against Reeves, adding to the likelihood that she will need to do more to meet the government's self-imposed fiscal rules. Reeves, speaking with Bloomberg on the sidelines of the World Economic Forum's annual meeting in Davos, Switzerland, said Britain's public finances were now in order but she would continue to take decisions to meet the fiscal rules.
• Earlier this month, a sharp sell-off in British government bonds, driven to a large degree by shifts in U.S. interest rate expectations, forced Reeves to say she would act to meet the government's fiscal rules.
• These include balancing day-to-day spending with revenues by the end of the decade and for public sector net financial liabilities to decline as a proportion of gross domestic product. However, market borrowing costs have fallen in the last week and as at Tuesday, British gilts were the third best-performing bonds among the Group of Seven countries this year.

(Source: Reuters)

• On January 21, 2025, Caribbean Information and Credit Rating Services Limited (CariCRIS) reaffirmed the Issuer/Corporate Credit Ratings assigned to National Commercial Bank Jamaica Limited (NCBJ or the Bank) at CariA and CariA+ (Foreign and Local Currency Rating) on the regional rating scale, and jmAA+ (Local Currency Rating) on the Jamaica national scale.
• The regional ratings indicate that the level of creditworthiness of NCBJ, relative to other peers in the Caribbean, is ‘good’. However, the national scale rating indicates that the level of creditworthiness of NCBJ relative to other peers in Jamaica, is ‘high’.
• CariCRIS also maintained a stable outlook on the ratings for NCBJ. The stable outlook reflects the high probability of a turnaround in profitability over the next 12-15 months due to the three consecutive declines in interest rates in Jamaica in the 2nd half of 2024, with further rate cuts anticipated.
• This is likely to result in a reduction in the cost of funds, thus positively impacting net interest income, as well as the booking of trading gains. Profitability is, however, expected to be tempered by an increase in expenses as NCBJ continues to implement strategic projects.
• That said, the Bank and its subsidiaries are expected to remain well-capitalised with good asset quality and NCBJ is expected to comfortably meet its financial obligations over the next 12 to 15 months.

(Source: CariCRIS)

• Local private equity firm, MFS Capital Partners (MFS CAP), has announced that its subsidiary, Micro-Financing Solutions (MFS) Limited, has rebranded and will now operate as Monolith Financial Services (MFS) Limited.
• The name change is said to align with the company’s evolution and its current strategic focus on providing a diverse suite of financial solutions to meet the needs of a broad client base.
• The rebranding reflects the company’s broader mission of fostering economic growth and inclusivity through a variety of financial solutions, while to its parent company, MFS Capital Partners, Monolith is set to be that stable foundation around which, the company will build out its portfolio of subsidiaries. 
• Having begun operations in 2010, Monolith Financial Services has transitioned from its initial offerings of micro-loans to a comprehensive range of financial services, comprising FX trading, remittances, bill payment services, and private credit from its three locations across Kingston.
• While the company no longer offers microloans as a part of its suite of products, the rebrand signifies the company’s continued commitment to financial inclusion by offering innovative and accessible financial solutions tailored to varying needs.

(Source: JSE)

• Panamanian authorities began an audit of the China-linked company that controls two ports adjacent to the Panama Canal, as President Donald Trump repeats threats to take over the waterway.
• The comptroller’s office sent a team of auditors on Monday (Jan 20) to the local offices of the Panama Ports Company, a subsidiary of Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings, to launch their investigation, the comptroller’s office said on X.
• Comptroller General Anel Bolo Flores said last week the probe would seek to verify compliance with the terms of a 25-year concession granted to the company and promised a “severe and strong” financial audit. Panama initially granted the concession in 1998, and the Panama Maritime Authority authorised its renewal in 2021.
• The scrutiny comes as Trump accuses Panama of allowing China to meddle in the canal. In his inaugural address on Monday, Trump reiterated his claim that China is operating the waterway and said that his administration would take it back.
• Panama’s government has repeatedly denied that there is any Chinese presence in the canal, and Trump has not yet produced any evidence to contradict this. Panama’s President Jose Raul Mulino on Monday reiterated in a post on X that the canal will remain under Panamanian control.

(Sources: Bloomberg & Business Times)

• Mexico's headline and core inflation rates will likely land below 4% in January, deputy central bank governor Jonathan Heath told newspaper Excelsior in a story published on Monday, adding that the bank does not need to exaggerate a restrictive posture.
• The central banker's forecast comes as some brace for upward pressure on prices, as the incoming U.S. president, Donald Trump, has threatened blanket tariffs on its southern neighbour's exports to the United States in addition to mass deportations. Both have the potential to drive inflation.
• Heath, one of four members of the central bank's policy-setting board, also told the newspaper that he aims to lower the Latin American economy's inflation rate to the bank's 3% target. In December, Mexico's headline inflation rate eased to 4.21%, according to official data, which also saw the core rate tick up to 3.65%.
• At the time, Heath hailed the evolution of prices as "good news," as inflation slowed to its lowest rate since October 2023.

(Source: Reuters)