How to do a rate hike

Daily update

As expected, the Bank of Japan raised rates to 1%, a level last seen in the distance past of 1995. This was a different move from the recent ECB policy error—unlike Europe, Japan began the year with an accommodative monetary stance. The rate increase is part of a process of returning to neutral, and is broadly considered appropriate.
China’s domestic economy continues to give a mediocre performance. May retail sales fell by more than expected. Government attempts to support the domestic consumer seem to be misplaced, as the consumer continues to fail to respond. International demand for products from China continues, and that supported industrial production.
The G7 taxpayer funded mini-break for global leaders continues. The newly emboldened Iran is likely to be a focus. Details of the memorandum of understanding between Iran and the US remain obscure—it seems unlikely that the Strait of Hormuz will be properly open by Friday, as US President Trump wants. Iran’s foreign ministry has indicated tolls will be charged in the future.
The German ZEW sentiment survey is due—at least this surveys economists’ views, but it is still subject to the problems of other survey evidence. US import prices are scheduled, ahead of threats of more tariffs being levied on US importers.