Next week is shaping up as a “big week” for global financial markets, with a series of central bank decisions that could set the tone for the remainder of the year. The Federal Reserve’s Federal Open Market Committee (FOMC) meeting leads the lineup, followed by rate decisions from the Bank of Japan (BOJ) and the Bank of England (BOE), while the European Central Bank (ECB) is set to announce its decision this Thursday. The Fed’s rate trajectory and whether the BOJ will deliver another hike have emerged as the market’s top concerns.
The most closely watched event is the two-day FOMC meeting beginning Tuesday, September 15. The rate decision will be announced at 3 a.m. on Thursday, September 17 (Seoul time). Market expectations are marginally tilted toward a hike. Beyond the rate decision itself, the meeting will also release the dot plot — committee members’ projections for future rates — along with updated economic forecasts. The inflation assessment is seen as the key variable.
The decision will be informed by employment and inflation data released since Fed officials voiced inflation concerns at last month’s Jackson Hole symposium. Another point of interest is how Chair Jerome Powell will respond to President Donald Trump’s pressure for rate cuts.
Ahead of the FOMC decision, the U.S. August Producer Price Index (PPI) and Consumer Price Index (CPI) will also be critical. Market participants believe that if inflation readings come in above expectations, the likelihood of a Fed rate hike will rise markedly. With July retail sales having fallen 0.6% month-over-month — defying expectations and turning negative — the August retail sales figure also warrants close attention.
The Bank of Japan will announce its policy decision on Friday, September 18. Financial markets are treating a 25bp (0.25 percentage point) hike at this meeting as nearly a foregone conclusion. With U.S. Treasury Secretary Scott Bessent applying pressure to stem yen weakness, some analysts suggest the timing of additional hikes could be pulled forward.
Attention is also focused on whether BOJ Governor Kazuo Ueda will signal the possibility of further monetary policy normalization before year-end. As the yen continues to strengthen, there is growing wariness that yen carry-trade unwinding could resurface. Adam Turnquist, chief technical strategist at LPL Financial, said, “The yen’s uptrend reflects a genuine shift in both fundamentals and technicals,” adding that “investors should watch the key ¥152 level.” He warned that a decisive break above this support line could accelerate yen strength and trigger short-covering, with ripple effects across global assets including U.S. Treasuries.
The yen has gained 4% in September alone, making it the strongest among major currencies. The dollar-yen exchange rate fell to ¥152.89 earlier this week (yen strengthening) before settling at ¥153.63 on September 9. The possibility of additional currency intervention by the Japanese government is also supporting the yen. Japan’s foreign securities holdings fell by $87.8 billion (approximately 118.1 trillion won) in August, which analysts attribute to funds used for Tokyo’s large-scale currency intervention.
The Bank of England will decide its policy rate on Thursday, September 17. At its previous meeting, the BOE held rates at 3.75% for a fifth consecutive time, but internal voices calling for hikes have persisted since then. The European Central Bank faces its decision this Thursday, with markets pricing in a 25bp hike as nearly certain. Jim Reid of Deutsche Bank noted, “Rising energy prices are having a significant impact on the ECB’s policy reaction function,” adding, “Tomorrow’s hike is effectively a done deal, but the path thereafter will be far more complicated.”
The U.S. Treasury’s bond buyback volume also sent ripples through the market. On September 9, the Treasury announced it would repurchase $6 billion (approximately 8.1 trillion won) in Treasuries with maturities in the 10- to 20-year range. While this is an increase from the previous $2 billion (approximately 2.7 trillion won), it fell far short of the $10 billion (approximately 13.5 trillion won) the market had anticipated. Immediately after the announcement, U.S. Treasuries sold off, with the 10-year yield rising 3.5bp to 4.839%. The 2-year yield also climbed 2.7bp to 4.425%.
Robin Brooks, senior fellow at the Brookings Institution, commented, “The problem with attempting to artificially lower long-term rates through buybacks is that if the market judges the buyback size as too small, rates can actually spike,” adding, “This demonstrates that underlying upward pressure in the market is very strong.”
In South Korea, the Korea Exchange will begin after-market trading on Monday, September 14. Trading hours run from 4 p.m. to 8 p.m., operating with real-time matching in the same manner as the regular session. Unlike the existing after-hours single-price auction, a price limit of ±30% will apply. However, ETFs and ETNs will not be tradable in the after-market session.
The economic calendar is also packed. On Tuesday, September 15, China releases August industrial production, retail sales, and fixed-asset investment, while the U.S. publishes the September Empire State Manufacturing Index. South Korea’s August import prices will also be released that day. Import prices have declined for two consecutive months, driven by falling exchange rates and oil prices. On Wednesday, September 16, U.S. August retail sales and Japan’s export statistics will be released. On Thursday, September 17, U.S. housing starts and building permits, along with the eurozone’s final August CPI, will be published. The preliminary eurozone inflation reading showed a 3.3% year-over-year increase. On Friday, September 18, U.S. August industrial production and South Korea’s August producer prices will be released. That day also marks the simultaneous expiration of U.S. futures and options — the so-called “quadruple witching” — which could amplify market volatility.
Meanwhile, in the U.S. Senate, a cloture vote on the “Clarity for Payment Stablecoins Act” — a bill closely watched by the digital asset market — is scheduled for September 15. The legislation has been stalled for over a year since passing the House. Even if the cloture vote succeeds, significant procedural steps remain before final enactment, but it represents a critical inflection point for the crypto industry, which is hoping for regulatory clarity.