ANALYSIS: Why the Recent Market Volatility Is Unlikely to Impact Canada, US Interest Rate Cuts

When the markets took a plunge on Aug. 5, it was partly attributed to the Bank of Japan’s recent decision to raise its key interest rate to 0.25 percent after ending eight years of negative interest rates earlier this year. As the markets recovered in the next several days, so did Japan’s Nikkei, following reassurances from the deputy governor of the Bank of Japan Shinichi Uchida that a further hike at this time is unlikely. In making this declaration, Uchida cited the market volatility as the reason. “As we are seeing sharp volatility in domestic and overseas financial markets, it’s necessary to maintain current levels of monetary easing for the time being,” said Shinichi Uchida on Aug. 7....