The move marks an end to Japan's famous and long-running negative interest rate policy. The Bank of Japan (BOJ) announced on Tuesday the end of its negative interest rate policy and increased borrowing costs for the first time in 17 years. The negative rates were a part of Japan's aggressive monetary easing program. "The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1%," the central bank said in a statement, moving them from their previous level of negative 0.1%, thus still keeping rates stuck around zero. It was Japan's first interest rate hike since 2007 and marks an end to a prolonged period of ultra-loose monetary policy aimed at stimulating the economy. More details regarding the decision and possible further hikes would follow BOJ Governor Kazuo Ueda's press conference later on Monday.  According to the Nikkei newspaper, Japanese Prime Minister Fumio Kishida said, "We trust the BoJ," adding that the decision "is in their hands." How significant is the interest rate rise in Japan? The rate hike has a lot of "symbolic significance," Izumi Devalier, head of Japan economics at BofA Securities, said ahead of the announcement. "But the actual impact on the economy is very small." She believed that the BOJ will likely continue keeping monetary conditions loose. Raising the rate will make loans more expensive for consumers and businesses. Following the rate hike, Japanese stocks saw fluctuations on Tuesday, and the yen dropped by 0.39% to 149.74 against the dollar. Understanding BOJ's policy  While many western central banks kept interest rates at or near zero in the roughly 15 years after the financial crash of 2007 and 2008, Japan's was already moving in that direction by the mid 1990s.  This was both as part of a bid to encourage spending and inflation in an aging society with negative population growth, and also in a bid to keep the country's debt repayments manageable, with Japan the most endebted country on the planet as a share of GDP.  In recent months, for the first time in years, inflation in Japan was approaching the Bank of Japan's 2% target level, prompting speculation in recent weeks that a rates change was likely either in March or April's BOJ meeting.   

The primary goal of the visit of the Foreign Secretary of Bhutan, Aum Pema Choden to India was to evaluate mutual collaboration between India and Bhutan and expand it to new areas. Foreign Secretary of Bhutan accepted an invitation from Foreign Secretary of India Vinay Kwatra to undertake an official visit to India and arrived in the national capital on a 2-day visit from July 28-29, Bhutan Live reported. Bhutan and India have excellent bilateral ties that are based on mutual respect, understanding, and trust at all societal levels. This friendly relationship is demonstrated by strong friendships and tight relationships at the local level. The Foreign Secretary's recent visit served as a reminder of the long-standing custom of high-level exchanges, which provide a forum for talking about and resolving issues of common concern and therefore promote ongoing collaboration. According to Bhutan Live, the advancements in bilateral cooperation in a number of areas, such as energy, development partnerships, cross-border connectivity, trade and economic ties, digital development, science and technology, skill development, and people-to-people ties, were acknowledged with gratitude by both foreign secretaries of India and Bhutan during the recent meeting. Kwatra and Choden inaugurated numerous projects that were implemented with assistance from India. These projects form part of the Flagship Digital Drukyul Project and include the Citizen Service portals, National Single Window portal, and Government Initiated Network Project. The External Affairs Minister of India, S Jaishankar, also met with the Bhutan Foreign Secretary on July 29, and later stated that India supports Bhutan's development objectives. Prior to this, on January 18–20 this year Indian Foreign Secretary Vinay Kwatra paid a goodwill visit to Bhutan. Kwatra and his Bhutanese counterpart had bilateral discussions during which significant and shared issues were discussed, Bhutan Live reported. The founding of India's special office in Thimphu in 1968 signified the beginning of diplomatic ties between India and Bhutan. Throughout the years, we have supported one another on regional and global platforms and steadily improved our connection in the strategic, cultural, and economic spheres. 

The US Federal Reserve has raised interest rates by a quarter of a percentage point in a bid to tackle inflation. The Fed also said that the US economy was showing "resilience" and would not fall into a recession. The US Federal Reserve raised its benchmark lending rate on Wednesday by a quarter of a percentage point. This is the highest level since 2001 and is the Fed's 11th hike in its last 12 meetings. What did the Fed say about the hike? The Fed indicated that it could implement further increases in the future. It said that it will "continue to assess additional information and its implications for monetary policy." The rise lifted the Fed's key lending rate to a range between 5.25 and 5.5%. Federal Reserve Chair Jerome Powell said that inflation in the US remains "well above" the central bank's target of 2%. "The process of getting inflation back down to 2% has a long way to go," he said. US economy sees 'moderate' growth Key measures of inflation remain more than double the 2% target set by the Fed. However, job gains remain "robust," and the US economy was growing at a "moderate"  pace, the Fed said. Powell said that "we do have a shot" for inflation to return to the Fed's target without a substantial increase in unemployment. The US government is expected to report on Thursday that the economy grew at a 1.8% annual pace, the Reuters news agency cited economists as saying. The Fed's chair said that the central bank's staff are "no longer forecasting a recession." "So the staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession," Powell said. The Fed had in its June policy meeting predicted a mild recession starting later in 2023.

Boeing CEO David L Calhoun praised Prime Minister Narendra Modi's vision for India's airline industry and highlighted the remarkable pace of airport development in India and the significant international opportunities. "The most important takeaway is the PM's passion for India's development. He does have a specific interest in aviation, in aerospace. It is a big vision," said the Boeing CEO in an exclusive interview with ANI after meeting PM Modi in Washington DC today. He emphasized the importance of India playing a significant role not only for the country but also for the region broadly in aviation and aerospace. "I would like for India to play a significant role not just for India but for the region broadly. I think it's great when technologies and opportunities align with the vision a leader has for the country and that's where we are," said Calhoun after meeting PM Modi. He said that the welcome accorded to business and investment and opportunity speaks volumes about PM Modi's vision for India. "I think, obviously not just to me, but to pretty much everybody who has interacted with him," he said. The Boeing CEO further said that his company wants to support India as there is a huge domestic market that needs to be satisfied. "At Boeing, we support that 100 per cent. There is a giant domestic market that needs to be satisfied. Airport development is now moving at a pace that the country's never seen before. And then maybe even bigger is the international opportunity where Air India is making enormous investments, new equipment, new skills, and new talents to be able to support that international traffic, which it deserves a big share of," he said. The world's two largest jet manufacturers have announced record-setting deals driven by surging demand from regional airlines in India, signalling a possible resurgence for a commercial aviation industry battered by a years-long covid-induced malaise. Air India has announced two major deals worth around $100 billion to buy 470 passenger planes from top aircraft manufacturers, Airbus (with France) and Boeing (with United States). Air India's deal with Boeing is for 190 737 MAXs, 20 787-Dreamliners and 10 777X jets, with the option to purchase an additional 50 737-MAXs and 20 787-Dreamliners, according to a company statement. The airline's order with Airbus is for 210 A320neo and A321neo narrow-body jets and 40 A350 widebodies. The deal reflects India's aspirations to be a world leader in the aviation sector, which is projected to require over 2,000 aircraft in the next 15 years. The deal is expected to make India the third-largest player in the aviation sector and create new opportunities in aerospace manufacturing under India's 'Make in India-Make for the World' vision. In a Tuesday announcement at the Paris Air Show in Le Bourget, France, Boeing said it has finalised an order for up to 220 commercial jets for the fast-growing Air India, with options for another 70 planes. The same airline firmed up an earlier deal for 250 jets from Airbus, Boeing's European rival. Just a day earlier, budget airline IndiGo placed a firm order for 500 Airbus A320 passenger jets. It's the largest deal in the history of commercial aviation. India's civil aviation is among the fastest-growing aviation markets globally and will be a major growth engine to make India a $5 trillion economy by 2024. The nation's aeroplane fleet is projected to quadruple in size to approximately 2500 aeroplanes by 2038. The White House issued a "fact-sheet" on Thursday during PM Modi's state visit to the US, which said AI's order for over 200 Boeing aircraft "will support more than one million American jobs across 44 states and contribute to the modernisation of the civil aviation sector in India." Source: NDTV

Turkey has increased its base interest rates by a whopping 6.5%, the clearest indication yet that the unconventional economic policy dubbed "Erdonomics" might be history now in Recep Tayyip Erdogan's new government. Turkey's central bank delivered a large 6.5% interest rate rise on Thursday, boosting the rates it charges commercial lenders for borrowing money to 15% from 8.5%.  It's the first time Turkey has raised its rates since March 2021 — indeed the country had been raising eyebrows by cutting its rates even as inflation spiraled out of control as of late. "Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved," the central bank said. The bank also promised to "simplify and improve" policies that past governments under President Recep Tayyip Erdogan used to try and weather Turkey's worst economic crisis since the 1990s. Analysts anticipate that the rate is likely to reach a level around 25% by the end of the year — roughly where it was as recently as 2019. The decision appears to indicate a return to more conventional economic policy, after Erdogan secured another term in office and then appointed two internationally respected former finance sector workers to the central bank and finance minister positions.  'Erdonomics' in the dustbin now Erdogan's re-elected?  Turkey's highly unorthodox fiscal policy of the last couple of years earned the nickname "Erdonomics" after President Erdogan. The perceived economic wisdom is that increasing interest rates can help tame inflation — by discouraging people, businesses and banks from borrowing and spending.  But at the height of Turkey's inflation, which was more than 80% year-on-year for 2022, the central bank was repeatedly lowering its rates under pressure from Erdogan. If low rates could only spur growth, Erdogan believed, then inflation would somehow take care of itself.  He burned through three central bank bosses in four years as one by one they resisted his counterintuitive theory that promoting growth and printing money would somehow also stifle inflation. He also sacked the national statistics body chief, accusing the organization of exaggerating the scope of Turkey's financial difficulties.   New appointees were expected to restore normalcy Erdogan appointed former Goldman Sachs director Hafize Gaye Erkan to the central bank role soon after narrowly winning re-election. And he made former Merryl Lynch banker Mehmet Simsek finance minister. Analysts had taken these appointments as an indication he would no longer be seeking to micromanage interest rate policy. However, Erdogan has not conceded any failings, saying that he would "accept" the policy decisions of his new financial appointees but that he remained an "enemy" of high borrowing costs. According to official figures, the worst of Turkey's inflation is now passed, with a rate of 39.5% last month, but independent research group ENAG argues the real figure is much higher, at around 108%. The lira has also been losing value against the US dollar steadily, depleting the country's foreign exchange reserves and Turks' international purchasing power. It costs over four times more lira to buy a US dollar now than it did in 2018, the currency has lost around 20% of its value against the dollar just this year. Much of Erdogan's domestic reputation rests on the economic growth during his roughly 20 years in power, either as prime minister or later president. And any reprieve from pressure could prove short-lived for his new financial officials. Turkey faces more local elections in 2024, by which point Erdogan might again have a sharper focus on the ballot box than the national balance sheet. Investors had already responded negatively to news of Erdogan's election victory and the likely implications for Turkey and the lira, rushing away from the currency following the election results at the end of May.

Apple CEO Tim Cook's visit to India, the latest by a top global executive, exemplified the rising tide of interest that corporations are showing in doing business with India, reported CNN Business. Cook was in India last month for launching two Apple physical stores -- in New Delhi and Mumbai -- where he was welcomed with huge cheers. According to the CNN Business report authored by Michelle Toh and Hanna Ziady, just days after his landmark trip, Pret A Manger, a trendy British sandwich chain, set up its first outlet in the commercial capital of Mumbai, as it bets on the country's growing middle class. Citing calculations from the United Nations India where it said India will surpass China to become the world's most populous nation, the CNN authors feel it will only cement its growing image as the "darling of the global economy". "The case for investing in India -- a nation of 1.4 billion -- is clear, and only bolstered by recent geopolitical shifts. As Western leaders look to boost economic cooperation with countries that share similar values, India, the world's largest democracy, stands to gain," they said. Until recently, many countries and companies "had put all their eggs in the China basket", said Partha Sen, professor emeritus at the Delhi School of Economics, according to the article. Now, as tensions continue to flare between the West and China, there is "a move to diversify away, and India fits right into it," Sen was quoted as saying by the CNN Business authors. The authors attributed India's economic growth potential to its "demographic dividend". Also, the signing of free trade deals with various countries has been warmly received around the world. "Since 2021, India has struck agreements with Australia, the United Arab Emirates and Mauritius. It is also negotiating deals with the European Union, the United Kingdom and Canada," the CNN Business authors noted. Russia, whose trade with the West has slumped since its invasion of Ukraine last year, is also interested in increasing ties with India, they added. The US and India have taken steps in recent months to strengthen their ties, particularly in defence and technology, as they attempt to counter the rise of an increasingly assertive China. In February, Air India bought more than 200 aircraft from Boeing (BA) in what was the American planemaker's third-biggest sale ever. US President Joe Biden hailed the deal saying that it was "the strength of the US-India economic partnership". While several countries are pivoting towards India, evincing an interest to invest across sectors, the IMF is also largely bullish on the country. The International Monetary Fund expects India to outperform all major emerging and advanced economies this year, logging GDP growth of 5.9 per cent. By comparison, the German and UK economies will stagnate while the US is expected to grow only at 1.6 per cent. If it can maintain its momentum, India will overtake Germany as the world's fourth largest economy in 2026 and knock Japan from the number three spot in 2032, the CNN Business report quoted an analysis by the Centre for Economics and Business Research. Going ahead, India will benefit as companies diversify their supply chains away from China but obstacles remain. Alexandra Hermann, a lead economist at Oxford Economics, cited three obstacles -- stringent labor laws, high import duties and logistics challenges. 

North East India, also referred to as the North Eastern Region or NER is India’s easternmost region. This region is a critical and key geostrategic site for both India and Japan in sustaining multilateral relations because it shares borders with several other countries, including Nepal, Bhutan, China, Myanmar, and Bangladesh. For any Nation or industry, the growth of the North Eastern Region represents a difficult decision point for investment initiatives. The North Eastern Region has long-standing ties with Japan, dating back to the Second World War, when Japanese soldiers fought alongside the Indian National Army (INA), resulting in the raising of the first National flag at Moirang (Manipur). Other ties which pique Japan’s varied interest in investing in the region include the cultural and architectural similarities, geographical proximity and a ‘strategic interest’ in FOIP (free and open Indo- pacific) and other Indo-pacific visions, as well as the chance to strengthen ASEAN relations, the use of soft power diplomacy, and other potential financial gains. Japanese investment projects in NER North Eastern Region witnessed tremendous investment growth since 2019 after the meeting between Minister of State Jitendra Singh for the Ministry of Development of North Eastern Region (DoNER) and the Japanese delegation led by Ambassador of Japan Mr Kenji Hiramatsu; the meeting disclosed that the Government of Japan would invest an amount of 205.784 billion Yen, equivalent to approximately Rs 13,000 crore (Press Information Bureau, 2019) in several ongoing and new projects in different States of North Eastern Region. Some of the investments and collaborations include Guwahati sewage project in Assam, North East Road network connectivity improvement project which is spread over Assam and Meghalaya, North East network connectivity improvement project in Meghalaya, Biodiversity conservation and forest management project in Sikkim, sustainable management project in Tripura, etc. It is also important to note that Japan has invested in several other projects, including the development of primary schools in Manipur. Japan’s varied ‘strategic interest’ and its policy of ‘FOIP’ (Free and open Indo-Pacific region) Leading to Prime Minister Shinzo’s visit to India in 2017, the two States welcomed Japan’s Free and Open Indo pacific strategy, also known as FOIP; this strategy aims at ensuring all countries in the Indo-pacific region promote free trade with the unhindered movement of goods and services and the “Partnership for Quality Initiative” North East, Japan who is already cultivating significant presence in the Bay of Bengal region, especially in countries like Myanmar and Bangladesh, observes North Eastern region as a missing link in promoting this vision of FOIP signifying the very need and interest of its investment. The strategic location of the North Eastern region, which is bordered by several Asian Nations is important for Tokyo, as this region constitutes a critical geostrategic hub for the implementation of its FOIP vision of safe, open, and free Indo-pacific trade. In addition, Japan’s initiative to establish rule-based order in the region increased the interest of investors in the region. The growing geopolitical tension on Senkaku island between Beijing and Tokyo as well as the belligerent posture of Beijing in the region had globally forced Tokyo with no choice but to hunt for an “alternate investment” (Sharma, 2022). Tokyo’s futuristic perception of the North Eastern region as a significant location with a range of opportunities increases more solid and stable investment opportunities. This is due to Japan’s ongoing foreign policy, the positive bilateral relationship based on a number of shared values, and the history between New Delhi and Tokyo. The launch of various programmes, such as the National Highway Network, Product-Linked Incentives Programs and the Gati Shakti Master Plan, contributes to Japan’s “Strategic interest” in the North Eastern region. Japan views these programmes and projects as incentives for various investments (Sharma, 2022). Tokyo one of the pillars of the ‘Act East Policy’ Formerly known as the ‘Look East Policy’ which Narasimha Rao established in 1991, is acknowledged as a significant element of India’s foreign policy; it gained regular momentum under PM Narendra Modi after 2014. During PM. Shinzo Abe’s visit in 2017, India and Japan jointly decided to establish a forum called ‘Act East Forum’ (Basu, 2022) to identify projects for the ‘Economic modernisation’ of India’s North East region leading to different rapid growth like highways, biodiversity conservation, forest management projects, and forest conservation projects, etc. creating Tokyo as one of the major pillars of ‘Act East Policy.’ Due to its third-largest trading partner status and tight economic relations with ASEAN Nations, Tokyo eventually saw the need to develop North East India, often known as the gateway of Southeast Asian Nations. Source:  www.thesangaiexpress.com

The eurozone is expecting a third interest rate increase since July as inflation remains high. y the move will further stoke recession fears. The European Central Bank (ECB) was expected to increase its key interest rate by a further 75 basis points on Thursday as the eurozone struggles with runaway inflation. The hike would be the second such move by the ECB in recent months. It aims to dampen spending by increasing the cost of borrowing in hopes of bringing down rising costs of essential goods such as food and energy. Inflation in the eurozone was at around 10% in September, five times higher than the 2% maximum target. Recession fears Government spending during the coronavirus pandemic and the subsequent Russian invasion of Ukraine are seen as the main culprits for rising prices. Europe's withdrawal from Russian energy has left several economies in already precarious situations — Germany is expected to watch its economy shrink by 0.4% next year. Some European leaders have criticized the ECB's decision to increase interest rates, saying that it will pile problems on countries with high debt and that it will torpedo demand — further stoking recession fears. ECB President Christine Lagarde has said that inflation is "far too high" and called for more steps to be taken. She also warned eurozone members against high government spending that would counter the ECB's attempts to bring inflation back under control.

Tokyo stocks opened lower Monday as unease lingered over tightening monetary policy by the United States and investors awaited earnings reports by retailers due this week.   The benchmark Nikkei 225 index was down 0.49 percent, or 133.40 points, at 26,852.40 in early trade, while the broader Topix index slipped 0.21 percent, or 3.95 points, to 1,892.84.   "Focus this week is on the US and Chinese consumer price indexes for March," among other data, to glean clues on the Federal Reserve's monetary policy and that of other central banks, said Takashi Hiroki, chief strategist of Monex.   The Fed has recently taken a hawkish tone as it embarks on an aggressive tightening path, prompting traders to fret over the prospect of higher interest rates.   Investors in Tokyo are also paying attention to earnings reports by retailers, including convenience store chain Lawson, Muji casualwear operator Ryohin Keikaku, and Uniqlo operator Fast Retailing, Hiroki said.   The dollar fetched 124.89 yen in early Asian trade against 124.30 yen in New York late Friday.   In Tokyo, Lawson was down 0.88 percent at 4,470 yen ahead of its full-year to February earnings report due later in the day.   Takeda Pharmaceutical was up 0.43 percent at 3,711 yen after a report said it will halt new drug trials in Russia.   Among others, SoftBank Group was down 1.44 percent at 5,601 yen and Hitachi was off 0.91 percent at 5,853 yen, but Toyota was up 0.76 percent at 2,111 yen. Source: AFP/BSS AH

According to some diplomats Pakistan may have played a vital role in terms of removing Afghan government from the power. As well as establishing an effective network in Afghan territory for their own interest for over two decades. While the silence of the western countries, who have been chanting rhetoric over human rights and democratic values, has been the most surprising aspect of the Afghanistan crisis. Islamabad was not criticised when the Taliban governing council is formally referred to as the Quetta shura, after the city in Pakistan where it has operated for the past 20 years, reported Inside Over. While New Delhi has been continuously demanding the world to act against Lashkar-e-Taiba and Jaish-e-Mohamed operating out of Pakistani territory. The Taliban's two-decades-old dreams to grab power, its recent aggressive advance against the government and the Kabul blasts all have a Pakistani element in them irrespective of whichever different group claims credit. All these organizations have worked as the Pakistan establishment especially its intel wing's proxies. The Inter-Services Intelligence has been using these groups to fuel the insurgency and carry out a attack in countries at differing points in an attempt to promote its agenda. Even Pakistan's Interior Minister Sheikh Rashid has said that the Taliban's members, who fought with Afghanistan's government forces, received treatment in Pakistani hospitals and their families were sheltered in Pakistan. The ISI and the Taliban have deep ties with each other along with the close links in shura councils. Islamabad has been aiding the Taliban from providing logistical supports to giving safe heavens to them. The Taliban are trained, directed and controlled by Pakistan. Islamabad has been attempting to legitmise the Taliban as Afghanistan's political representative whether it's about the Doha agreement's signing with the US in 2020 or the recent meeting between the Taliban leaders and China's Foreign Minister Wang Yi. Islamabad has been making serious efforts to legitimise the Taliban assuming it won't be sanctioned for harboring a group that can cause turmoil in the country. The humanitarian crisis is looming around Afghanistan and it could be stopped from going beyond the national boundaries if the US, UN, or Security Council member get to know the Taliban's violent ideology and its connection with Islamabad. According to the Inside over, a recent report of the UN monitoring team has accused the Taliban of having a close connection with Al-Qaeda, active in the Pakistan border regions, and highlights its links to the Pakistan-based terrorist Haqqani network. Source: ANI BM