Expert: Central Banks Exercise Caution Amid External Shocks

SimCorp's Asia-Pacific Head of Investment Decision Research, Olivier Dacier, stated that central banks typically avoid taking risks. According to Jin10, when faced with external shocks such as Liberation Day tariffs or the COVID-19 pandemic, they tend to pause actions and emphasize the need for data. This cautious approach was evident in the Federal Reserve's recent measures and is also being adopted by the Bank of Japan. Dacier noted that once conditions stabilize this year, the Bank of Japan might resume interest rate hikes. However, its bond-buying operations, which limit long-term bond yields, have not been well-received by the market, leading to a depreciation of the yen. The divergence in opinions during meetings of the Federal Reserve, the Bank of Japan, and the European Central Bank is significantly greater than before, highlighting a lack of confidence in the available data.