DECEMBERASIA BUSINESS OUTLOOK8NEWSROOMBANK OF JAPAN LIKELY TO HOLD INTEREST RATES STEADY, SURVEY REVEALSJapanese auto giants Honda and Nissan are in talks to set up a holding company, according to a person with knowledge of the matter, a move that would allow them to share more resources amid competition upending the global industry. The talks, first reported by the Nikkei newspaper, would allow the two automakers to cooperate more closely on technology at a time when the industry is being rewritten by the likes of Tesla and Chinese rivals.It was not immediately clear whether a new holding company was aimed at eventually establishing a full union between the two companies, although Nikkei said they were beginning merger talks.The two automobile manufacturers have increased ties in recent months as they wrestle with the changing EV landscape. As well as heavy competition, automakers also face stalling demand in Europe and the US, intensifying the pressures on them.Honda and Nissan on Tuesday issued identical statements saying no merger had been announced by either company."As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other's strengths," the companies said in separate statements, adding they will inform stakeholders of any updates at an appropriate time.In addition, French automaker Renault, a major Nissan shareholder, said it had no information and declined to comment. Money market brokerage Ueda Yagi Tanshi found that more than 90 percent of market players anticipate the Bank of Japan to maintain interest rates at this week's policy meeting.Targeting 150 banks, securities companies, insurers, and other financial institutions, the poll was carried out between December 12­16 in advance of the central bank's two-day conference that ends on Thursday.91 percent of respondents stated that they anticipate the central bank will maintain short-term interest rates at 0.25 percent this week. However, 95 percent of respondents--up from 67 percent in the previous survey--foresee an increase in the overnight call rate, which the BOJ sets as its policy aim, in three months.The BOJ increased its short-term policy target to 0.25 percent in July after ending negative interest rates in March. It has indicated that it is prepared to raise again if prices and wages move as anticipated, strengthening the belief that Japan will experience inflation of 2 percent for the foreseeable future.Market anticipation of a move has fluctuated between December and January as a result of the central bank's caution on the timing of the next rate hike.Since policymakers would rather spend more time examining foreign concerns and hints about the wage outlook for the upcoming year, the BOJ is inclined to maintain interest rates unchanged in December. According to the sources. HONDA & NISSAN INCHING CLOSER TO FORMING A TECHNOLOGY COOPERATION DEAL
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