Bank of Japan and US Labor Market Figures: Key Events This Week
Inflation from Australia, the Eurozone, and the United States
Have tariffs begun to affect US growth figures?
Miscellaneous Economic Data
After a week that saw a decline in tensions and uncertainty following optimistic statements from US President Trump, who has become the dominant force in the general markets, uncertainty has risen and fallen after he announced earlier this week that he does not intend to dismiss US Federal Reserve Chairman Jerome Powell. This is in addition to upcoming news regarding an agreement with China and a reduction in tariffs from both sides. Additionally, some miscellaneous economic figures have been announced, most notably the Purchasing Managers’ Index (PMI) for the services and manufacturing sectors for most major economies, US durable goods sales, US consumer confidence, and UK retail sales. Financial markets are returning to a new week with new economic figures that will cast a shadow over this week’s trading, led by the Bank of Japan meeting, along with inflation figures from the Eurozone, Australia, and the United States, labor market and growth figures from the United States, and many other miscellaneous economic figures.

Bank of Japan
The Asian session on Thursday morning, May 1, will witness a meeting of the Bank of Japan’s monetary policy committee members to discuss monetary policy developments, determine interest rates, and announce the bank’s quarterly forecast for the Japanese economy. Expectations indicate that the bank will keep interest rates unchanged at 0.50% at Thursday’s meeting, the second consecutive meeting after raising them in January.
The Japanese central bank had been planning to raise interest rates several times this year, but with US President Trump announcing Liberation Day in early April and imposing significant tariffs on countries, market expectations that interest rate hikes might be further along than previously anticipated have diminished. Markets now expect a single cut of 25 basis points in the third quarter of this year, while expectations indicate that the Bank of Japan may be forced to postpone its forecast for achieving its 2% inflation target. Recent figures from the Japanese capital, Tokyo, showed core inflation accelerating in April. The core index in the capital rose to 3.4%, up from 2.4% in March, marking the second consecutive month of growth. The index, which excludes volatile fresh food costs, rose to 3.2%, exceeding market expectations. The Japanese economy has been impacted by the trade war imposed by Trump and the increase in tariffs, particularly on automobiles, which carry a 25% tariff. The automotive sector is a key pillar of the export-dependent Japanese economy. This explains the Japanese government’s rush to reach an agreement with Trump, despite the fact that the value of the Japanese currency may be a key factor in these negotiations, following Trump’s accusation that Japan is deliberately weakening the yen to give exports a trade advantage.

Markets will focus on the Bank of Japan’s economic forecasts for growth and inflation, as members are expected to lower their growth forecasts due to the increased risk of tariffs, change their inflation forecasts, and determine when the target will be achieved. Markets will also monitor any trade talks between the Japanese and US sides before or after the Bank of Japan’s meeting.

Inflation figures from Australia, the Eurozone, and the United States
Australia
Australia is expected to announce inflation figures on Tuesday morning. The figures are expected to show an increase in inflation in March of 0.8%, recording 2.3% year-on-year, compared to 2.4% in February and 2.5% in January. This supports market expectations that the Reserve Bank of Australia will cut interest rates at its next meeting on May 20.
Eurozone
Eurozone countries will begin releasing their March CPI inflation figures successively during the sessions of this week. Spain will begin tomorrow, Tuesday, followed by figures for Germany, France, and Italy on Wednesday. Official figures from the Eurozone will be released at the end of trading on Friday. Inflation is expected to slow in April to 2.1%, compared to 2.2% in March and 2.3% in February. The core index is expected to rise to 2.5%, up from 2.4% in March and 2.7% in February. European Central Bank President Christine Lagarde indicated in her recent statements that US tariffs are negatively impacting the eurozone’s economic outlook. Will the Brill figures support the ECB’s expected interest rate cut on June 5, after seven cuts since June of last year?
United States
Markets will be watching the Fed’s preferred inflation indicator, the Consumer Expenditures (CPE), due on Wednesday. Price pressures are expected to have eased in March, with monthly core inflation slowing to 0.1% from 0.4% in February, and annual core inflation declining to 2.2% from 2.5%.

US Growth and Labor Market Figures
On Wednesday, April 30, in the US session, attention will turn to the preliminary reading of US GDP growth. Markets will be watching the figures to monitor the impact of tariffs on economic growth. Estimates indicate that the US economy may record modest growth of between 0.1% and 0.4% in the first quarter of this year. This is a decline compared to 2.4% in the fourth quarter of last year and the lowest reading since the second quarter of 2022.
The Atlanta GDP NOW model, in its latest growth forecast, released last week, predicted a contraction in the US economy in the first quarter.

By 2.5% in the first quarter.
In contrast, at the end of the week, Friday, May 2, as is the case on the first Friday of every month, the US Department of Commerce announces nonfarm payrolls (NFP) figures, including unemployment rates and wage levels.
Estimates indicate that the US economy may add approximately 300,000 jobs in April, following the 228,000 jobs added in March, with the unemployment rate remaining at 4.2%, the monthly wage rate remaining at the March reading of 0.3%, and the annual wage rate rising to 3.9% from 3.8%.

Miscellaneous data we’ll be tracking during the week
Monday
Canadian Federal Election
Tuesday
Spanish Inflation Figures
Job Vacancies and Labor Turnover
Wednesday
Inflation from Australia, Germany, France, and Italy
US ADP Private Sector Employment Figures
US GDP
Consumer Spending Inflation
Inventory Figures
Thursday
Bank of Japan Meeting
Weekly Unemployment Claims
ISM Manufacturing PMI
Friday
Australian Retail Sales
Eurozone Inflation Figures
US Employment, Unemployment Rate, and Wages (NFP)