FTSE 100 Live: Stocks Dip as Bank of Japan Warns of Trade War Uncertainties

FTSE 100 Live: Stocks Fall as Bank of Japan Warns of Trade War Uncertainties

The FTSE 100 (^FTSE) and European stocks faced downward pressure on Wednesday after the Bank of Japan (BoJ) raised concerns over the "high uncertainty" caused by former US President Donald Trump's trade policies.

Bank of Japan Highlights Trade War Risks

Governor Kazuo Ueda of the Bank of Japan stated, “In the past month, there have been rapid changes in the scope and speed of US tariffs. However, uncertainties remain high, especially with potential developments beyond April.”

Ueda emphasized that the BoJ will closely monitor how US trade policies evolve, their impact on global economies, and the subsequent effects on Japan’s economic and price outlook.

Despite Japan’s annual wholesale inflation rate reaching 4.0% in February, the central bank decided to keep interest rates unchanged at 0.5%.

Trump’s Tariffs and Federal Reserve Decision in Focus

Earlier this week, a White House official hinted that Trump’s administration plans to enact new tariffs by April 2, 2025. This move has added to the unease in global markets.

Traders are also closely watching the US Federal Reserve’s second policy decision of 2025, expected later today. While the Fed is likely to keep interest rates steady, its economic projections and press conference will be scrutinized for insights into future policy directions.

Jim Reid of Deutsche Bank (DBK.DE) commented, “Although this meeting may not be groundbreaking, the press conference could feature challenging questions for Chair Powell. His responses, likely non-committal, will still be worth watching.”

European Markets React

London’s FTSE 100 (^FTSE) was down 0.4% in early trading, while Germany’s DAX (^GDAXI) dipped 0.4%. France’s CAC 40 (^FCHI) remained flat.

In Germany, positive news emerged as the CDU/SPD/Greens coalition secured a two-thirds majority for debt brake reforms, paving the way for a significant boost in defense spending and a €500 billion infrastructure fund.

The pan-European STOXX 600 (^STOXX) also saw a slight decline of 0.2%.

Wall Street and Currency Movements

Wall Street futures indicated a positive start, with S&P 500 (ES=F), Dow (YM=F), and Nasdaq (NQ=F) futures all in the green.

Meanwhile, the British pound (GBPUSD=X) fell 0.2% against the US dollar, trading at 1.2969.

Key Takeaways

• The Bank of Japan warns of "high uncertainty" due to Trump’s trade policies.
• FTSE 100 and European stocks decline amid global economic concerns.
• US Federal Reserve’s policy decision and economic projections are in focus.
• Germany’s debt brake reforms signal potential growth in defense and infrastructure spending.

Stay tuned for more updates on how global markets are navigating these uncertain times.