Japan will punt on raising rates especially given the recent increase in the value of the yen which hurts its giant exporters. In addition, the political weakness of the ruling party makes a rate hike very unlikely.
The uncertain economic outlook will lead to the European Central Bank’s to decide not to go ahead with a planned increase on September 6th in eurozone interest rates, especially after US Federal Reserve warnings about the potential risks to US economic growth.
German investor sentiment is perhaps overreacting to market turbulence. The ZEW institute’s “economic sentiment” indicator fell for the third consecutive month to the lowest level since December last year. At minus 6.9 points, down from 10.4 points in July, the index remains significantly below its historical average.