- Rising yields and weaker IDR renew rate-hike concerns, yet FX trends, liquidity conditions, and BI policy suggest low probability.
- Recent SRBI yield moves reflect liquidity calibration, not tightening, keeping rate hikes unlikely while delaying potential rate cuts.
- BI calibrates SRBI awards to balance liquidity and credit as limited FX intervention and seasonal USD demand pressure.
HIGHLIGHTS
- Risk of Rate Hike on Rising Yield and Weak IDR
- SRBI Yields vs Bid-to-Cover Signals
- Constraint on FX Intervention
- BI Meeting: Stability remains at the fore
- Capital Market – Volatility is on the rise
- Upcoming SBSN Auction
- Previous SBSN Auction Results
This Week Key Focus
- US Interest Rate Decision – January 2026 (Thursday)
- US Trade Balance – November 2025 (Thursday)
- Japan Unemployment Rate – December 2025 (Friday)
- Japan Retail Sales – December 2025 (Friday)
Last week Key Events
GLOBAL UPDATES
- The US PCE and core PCE price indices in November increased by 2.8% y/y (0.2% m/m),
- Japan’s headline inflation eased to 2.1% y/y in December 2025
- Bank of Japan (BoJ) held the short-term policy rate steady at 0.75% at its first meeting of 2026
DOMESTICL UPDATES
- Broad money (M2) growth accelerated in December 2025
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