Nissan USA production plan: a brief analysis.
1. Possibility of EV production delay.
Impact from elimination of tax credits and policy uncertainties.
Do not produce unnecessary models.
2. Factory Plan
Mississippi plant: New EV4 model production scheduled for 2027-2028.
Tennessee Factory: Considering increasing production of hybrid Autos.
3. Mexico Joint Venture Factory
Production of QX50 and QX55 gasoline Autos will end in December 2025.
4. Reviewing the system.
In the USA, 2,000 people will be reduced, and production volume will be reduced by 25%.
A total of 9,000 people will be reduced worldwide, and production capacity will be reduced by 20%.
5. Depending on the policy.
The key lies in the direction of tax deductions and tariff policies.
【Educational Perspective】
Nissan's revision of its USA production plan is a practical choice that responds to policy uncertainties and market demand.
Especially the widespread adoption of EVs may be delayed due to the elimination of tax incentives and high costs, while the strategy for increasing production of hybrid cars is solid.
On the other hand, while employee reductions and production cutbacks are necessary to maintain competitiveness, efforts to minimize the impact on the regional economy and employees are required.

National Consumer Price Index (Core CPI).
December 2024: a 3.0% increase compared to the previous year.
In the 3% range since August 2023.
Exceeding the Bank of Japan's 2% target for 33 consecutive months.
energy prices
Increased by 10.1% (impacted by the end of government subsidies).
Core Core CPI (excluding fresh food and energy).
Up 2.4% (flat compared to the previous month).
In line with market expectations.
Bank of Japan's movements
Confident in the progress of wage increases.
Additional rate hikes expected at the monetary policy meeting on January 24th.
Background
The high consumer prices holding steady could be a factor supporting the decision to raise interest rates.
【Educational Perspective】
In December 2024, the national consumer price index (Core CPI) rose by 3.0% compared to the previous year, with the end of government subsidies being the main reason for the 10.1% increase in energy prices.
The core core CPI, excluding fresh food and energy, rose by 2.4%, remaining flat, while significantly exceeding the Bank of Japan's target of 2%.
The Bank of Japan is likely to determine an additional interest rate hike at the meeting on January 24, placing emphasis on the progress of wage increases.
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Rate hike outlook.
A rate hike from 0.25% to 0.5% is being strongly considered.
The market has already factored in around 90% of a rate hike in January.
Focus for the future
The final target interest rate (terminal rate) is estimated to be 1%.
The rate hike pace is expected to be about once every six months.
The remarks at Governor Ueda's press conference are attracting attention.
Financial Estimates
There is a possibility of upward revision of consumer price financial estimates due to the rise in rice prices and the progress of depreciation of the yen.
It is expected that the price target of approximately 2% will be maintained until the fiscal year 2026.
Exchange rate risk and market response.
The depreciation of the yen pushes up import prices.
The key is how Governor Ueda will proceed dialogue with the market.
Impact of the new USA administration.
Uncertainty in US policies remains a risk factor.
Impact on the global and Japanese economy is also being monitored.
【Educational Perspective】
The Bank of Japan is expected to decide on an additional interest rate hike (0.25% → 0.5%) at the January meeting.
The market has already factored in, and attention is focused on the next interest rate hike pace and the final interest rate (expected 1%).
There is a possibility of upward revision in price forecasts due to the rice price surge and the depreciation of the yen.
There is an expectation to maintain a 2% target until the fiscal year 2026.
Attention is focused on the risk of yen depreciation and dialogue with the market at Governor Ueda's press conference.

① Project Overview
SoftBank Group, OpenAI, and Oracle Corp led AI joint venture.
Initial investment amount 2
100 billion dollars (approximately 15,560 billion yen).
Future investment amount 3
Expanding to 500 billion dollars (approximately 78 trillion yen) in the future.
Creation of employment.
Approximately 0.1 million people.
Role of leading companies.
SoftBank Group: Fundraising, strategic leadership.
OpenAI: Development and provision of AI technology.
Oracle Corp: Infrastructure construction and cloud service support.
6. Objectives and Significance
Expansion of AI technology development and application.
Construction of the next-generation AI ecosystem.
Supporting the growth of the USA economy.
Challenges and concerns
Fundraising: Concerns about massive investments compared to SoftBank G's cash and cash equivalents (3 trillion 800 billion yen).
Competitive environment: Intensification of AI technology competition with other countries and companies.
Political influence: Consideration of political risks as a project led by President Trump.
【Educational Perspective】
"Stargate" may herald a new era of AI technology, but challenges such as funding uncertainties and lack of clear applications are swirling concerns in my mind.
Emphasizing AI ethics and sustainability may create a competitive advantage in the business environment.

The expectation for a rate cut is dominant.
A rate cut is expected once this year in the SOFR-linked options market.
The probability of a second rate cut is approximately 50%.
Speculation about interest rate hikes has emerged.
Bond traders have factored in a 25% possibility of interest rate hikes.
View that the policies of the Trump administration will reignite inflation.
Major economic indicators
Employment statistics released on January 10: Strong, supporting rate hike expectations.
CPI released on January 15: Mild content strengthens expectations for interest rate cuts.
The influence of the Trump administration.
Tariffs and immigration restrictions are putting upward pressure on prices.
The re-increase in wages suggests the possibility of accelerating inflation.
Expert opinions
Mr. Phil Satoru: Expects a rate hike in September 2025.
There are also voices suggesting a halt to rate cuts.
Market trends
US bond yields fell after CPI.
Situation where expectations of rate cuts and rate hikes are in conflict
【Educational Perspective】
The market considers one interest rate cut as the main scenario for the end of the year, with a probability of about 50% for a second rate cut.
On the other hand, concerns about inflation reigniting due to the Trump administration's tariffs and immigration restrictions have led to a 25% possibility of interest rate hikes.
The strength of employment statistics supports observations of interest rate hikes, while the mild results of the CPI strengthen expectations of interest rate cuts.
In the bond market, opinions are divided...

Benefits
• A decrease in Energy prices is expected.
• The competitiveness of domestic industries will improve.
• Border control will be strengthened to address illegal immigration.
• There is a possibility that policy implementation will proceed smoothly.
Demerits
• Measures against climate change will be pushed back.
• Concerns about rising prices of imported goods due to trade friction.
• Risks of destabilization in diplomatic relations.
• Potential deepening of international isolation.
【Perspective on Education 👀】
Mr. Trump’s re-election emphasizes a policy of prioritizing the country, aiming for the expansion of Energy production and the protection of domestic industries, while raising concerns about a retreat from climate change measures and international isolation. (Global warming phenomenon)
Tariff policies may support domestic employment in the short term, but they also carry the risks of intensifying trade friction and rising prices.
The Republican-controlled Congress supports policy implementation, but careful consideration is necessary regarding its impact on foreign relations and the global environment.

Support for Additional Interest Rate Cuts
Policy to gradually ease the restrictive economic measures. Recent economic data supports this decision.
Sharp rise in UK bond yields.
Global factors (US bond and European bond trends) are reflected. The market movement is evaluated as "orderly".
Decline in the Pound.
The decline is due to concerns about the fiscal outlook.
However, the market reaction is considered a natural movement.
A passive attitude towards market intervention.
There is a possibility that market intervention, such as that during the past Trus administration, will not be carried out this time.
Future direction of monetary easing policy.
A plan to gradually phase out economic restraint measures.
Impact on the market.
Pound depreciation risk.
Pound selling pressure intensifies on speculation of rate cut.
UK bond yield
There is a possibility of continued yield reduction due to expectations of interest rate cuts.
Impact on the international bond market
Linked with trends in US and European bonds.
Points to watch for in the future
Will the Bank of England decide on an additional interest rate cut at the next meeting?
Will the market's concerns about the fiscal outlook persist?
To what extent will the exchange rate of the Pound and the UK Bond market stabilize?
[Summary]
The additional rate cut by the Bank of England is reasonable as an economic support measure, but there is an increasing risk of a weaker Pound and lower UK bond yields. The reluctance towards market intervention provides some sense of relief, but to dispel fiscal concerns...

1. Slowdown in rate cuts
The FOMC has adopted a policy of gradually slowing the pace of rate cuts. It recognizes the need for a cautious approach.
2. Inflation Risks
Many participants emphasize the risk of rising inflation. There is a possibility that the progression of inflation will become a condition for further interest rate cuts.
③ Economic Outlook Economic growth forecasts have been slightly revised downward. The labor market is strong, consumption is robust, and inflation remains high.
④ Division in policy determination
Some argue for keeping interest rates unchanged. It is expected to implement two 25 basis points rate cuts in 2025.
　
⑤ Labor Market
While a solid maintenance of the labor market is expected, indicators should be carefully monitored. Pay attention to the December employment statistics.
Risk of the Trump administration
Potential impact on economic forecasts of policy changes by the new administration (tariffs, immigration, etc.)
Impact of the dollar
Short-term supported easily but medium-term volatility risk due to the uncertainty of the Trump administration.
Impact on Assets
Stocks: Negative for interest rate sensitive stocks.
Bond: Pressure from rising yields.
Gold Energy: Possibility of inflation risks pushing prices up.
Important Data: January 10 employment statistics are a key indicator that will influence policy outlook.
【Educational Perspective】
The FOMC is slowing down the pace of rate cuts...