Bank of Japan, Singapore MAS Expected to Hold Monetary Policy Amid Trade Uncertainty

Japan's central bank is expected to keep its policy interest rate steady at 0.5% during its upcoming two-day meeting, despite the easing of trade uncertainty following a new U.S.-Japan trade deal that lowers tariffs on Japanese exports. Policymakers remain cautious due to domestic political instability and the need to assess how the trade agreement will impact the economy and inflation, with the Bank of Japan indicating that future rate hikes will depend on economic performance. In Singapore, the Monetary Authority of Singapore (MAS) is also anticipated to maintain its current monetary policy stance, managing the exchange rate policy band amid resilient economic growth and stable inflation, while some economists predict minor easing measures. Regional currencies traded with little movement as investors awaited key interest rate decisions from the Federal Reserve and the Bank of Japan, along with ongoing U.S.-China trade negotiations aiming to extend a tariff truce before an August deadline. Overall, central banks in Asia are adopting a cautious approach to monetary policy amid persistent global economic uncertainties and evolving trade dynamics.