On Challenges Facing BOJ & ECB And Why Europe Is Appealing

The Bank of Japan isn’t expected to raise its benchmark interest rate this Friday—but should, argues William. Decades of near-zero interest rates have done more economic harm than good, so rate hikes would actually be good for Japan’s stock market. … The European Central Bank is widely expected to raise its key interest rate this week as energy-supply shocks intensify. Europe is a heavy importer of energy, so the Gulf war poses its greatest macro risk and increasingly dictates its rate path. … Toby reports that European equities are trading in that sweet spot investors look for: P/Es are relatively low but forward earnings at a record high, driven by expanding margins.