The Bank of Japan raised its policy rate from 0.25 to “around” 0.5%, the highest level in 17 years. The decision, which was expected, came after America’s president, Donald Trump, held off imposing tariffs, at least for now, calming markets’ fears. The bank also lifted its core-inflation outlook, a positive sign for a country hoping to escape decades of deflation.
America’s Senate moved to hold a vote on whether to confirm Pete Hegseth as secretary of defence. The decision was close—two Republicans joined all of the Democrats in voting against moving the confirmation procedure to its final stage. Questions have been raised over Mr Hegseth’s personal life and qualifications to lead the Pentagon. The vote is expected today. If two more Republicans defect, he will lose.
Monte dei Paschi di Siena, a problem child of the Italian banking system, proposed a “friendly” takeover of Mediobanca, a larger rival, for $13.9bn. Italy’s government, which bailed out the world’s oldest bank in 2017, has been seeking to consolidate the financial sector. A plan to merge MPS with Banco BPM was scuppered by a hostile takeover attempt by UniCredit, Italy’s biggest bank.
A judge temporarily blocked Mr Trump’s effort to end birthright citizenship, a practice guaranteed in America by the 14th Amendment. The judge, agreeing with the four Democrat-led states that brought the legal challenge, called Mr Trump’s executive order “blatantly unconstitutional”. It would restrict automatic citizenship to newborns with a parent who is either an American citizen or a permanent resident.
Boeing said it expects to lose $3.9bn in the October-December quarter, as the planemaker counted the cost of a two-month strike that paralysed aircraft production. It also lost money on some big military contracts in America. Reporting preliminary results, the firm estimated revenue for the most recent quarter to be $15.2bn, around $1.4bn lower than analysts expected.
Mr Trump offered international companies “among the lowest taxes of any nation” if they produce their goods in America—and warned that he would impose tariffs if they do not. In a remote address to the World Economic Forum Mr Trump also called on Saudi Arabia and OPEC to bring down oil prices, before demanding that the world’s central banks then lower interest rates “immediately”.
Singapore’s central bank loosened its monetary policy for the first time in nearly five years. The bank said it would slightly reduce the slope of its exchange-rate policy band, allowing for a slower rate of appreciation, citing a faster-than-expected decline in inflation and “trade frictions”. GDP growth is expected to drop from 4% in 2024 to between 1% and 3% over 2025.
Figure of the day: 27%, the extension of wildfire seasons around the world between 1979 and 2019. Read the full story.
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