Great unwind again?
Surging yields in Japan are keeping traders on the look out for the kind of carry trade unwind that rocked global markets in 2024
- The surge in JGB yields has been driven by sticky inflation, the prospect of BOJ’s rate hikes, rising fiscal challenges and reduced central bank bond purchases
GST Reform in India
The GST Council approved rate cuts and simplifications, effective from September 22, aimed at boosting consumption during the festive season
- Lower consumer prices could lead to a consumption stimulus of 0.7–0.8% of GDP, resulting in an additional 0.6 percentage points of economic growth
- GST accounts for 27.5% of India’s total tax revenues (USD 450 billion in FY25); the rate cuts are estimated to cause a fiscal cost of around USD 20 billion annually
- Despite the reduced revenue, the government remains confident in meeting its fiscal deficit target of 4.4% for the year
- Alongside personal income tax relief introduced earlier this year, the GST cuts should help keep inflation low (already at an 8-year low of 1.55% in July 2025), increasing the likelihood of future rate cuts
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