The Japanese yen  is steady on Wednesday. In the North American session, USD/JPY is trading at 151.60 up 0.02%. Earlier today, the yen came within a whisker of the 152 line, climbing as high as 151.95.

Japanese services PMI expands

Japan’s services PMI improved to 54.1 in March, revised lower from 54.9 in the preliminary estimate. Still, this beat the February reading of 52.9 and marked a seven-month high. The services sector has now expanded for 19 straight months and has been the driver of an improving Japanese economy, as manufacturing has been struggling. With the Covid-19 pandemic finally in the rear mirror, inbound tourism has risen and stronger domestic demand has boosted business activity. The solid PMI report comes on the heels of the Bank of Japan’s Tankan survey, which indicated that confidence in the services sector surged to a 33-year high in the first quarter.

The Japanese yen continues to trade around 34-year lows against the US dollar, raising concerns that Japan’s Ministry of Finance (MOF) could intervene in the currency markets in order to prop up the Japanese currency. The MOF has so far limited its response to verbal intervention, warning that it will take “decisive steps” to stop the yen’s slide and BoJ Governor Ueda said last week that the central bank is closely watching the yen’s movement.

The Bank of Japan made a major policy shift at the March meeting when it lifted rates out of negative territory, but the markets aren’t expecting any further tightening before the fall. The BoJ stressed at the meeting that monetary policy would remain accommodative for the time being, a signal that it is no rush to raise rates.

In the US, today’s ADP employment report was stronger than expected, with a gain of 184,000 in March. This beat February’s upwardly revised reading of 155,000 and was higher than the market estimate of 148,000. The ADP report isn’t considered a reliable precursor to NFP, but investors nonetheless attach importance to the release, which comes out only two days prior to nonfarm payrolls. The markets are expecting nonfarm payrolls to drop to 200,000 in March, compared to 275,000 in February.

USD/JPY Technical

• USD/JPY tested resistance at 151.87 earlier. Above, there is resistance at 152.39
• There is support at 151.45 and 150.93

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During the COVID-19 pandemic, a time filled with uncertainty and fear, ethnically minoritised NHS staff have not only had to contend with the virus but also a workplace fraught with inequalities.

Recent reports highlight concerning – and ongoing – issues for these NHS staff. For example, ethnically minoritised nurses face significant obstacles in securing promotions or new positions, and ethnically minoritised ambulance staff are twice as likely to suffer discrimination. These revelations confirm the persistent racial inequalities within the NHS, underscoring the urgent need for systemic change.

Such challenges harm not only their health and wellbeing but also the quality of care they provide at work. Moreover, these challenges have implications for their career progression and intentions to remain in the NHS – underfunded and overstretched as it is. Ultimately, the health of the NHS workforce has a big impact on the health of the nation.

As part of a team of researchers, I conducted a survey during the pandemic to identify inequalities in workplace experiences and to assess the health and wellbeing of staff. Participants included 4,622 NHS staff from across 18 NHS Trusts in England, between February and October 2021.

Our survey was developed with the Tackling Inequalities and Discrimination Experiences in Health Services (Tides) project, a national stakeholder group, as well as NHS peer researchers. It was part of the broader NHS Check study, which aimed to assess NHS staff wellbeing during the pandemic.

Consistently bleak picture

We found that staff from black, mixed and other ethnically minoritised groups were more likely to face difficulties accessing personal protective equipment (PPE) than their white British colleagues, and also more likely to experience harassment and discrimination from fellow staff members during the pandemic.

These findings align with similar studies such as the UK-Reach study of ethnicity and COVID-19 outcomes in healthcare workers, and the NHS’s own staff survey. All paint a consistently bleak picture of the challenges faced by ethnically minoritised groups within the NHS.

This situation was compounded by a consistent increase in harassment and discrimination that was identified in the years preceding the pandemic.

It echoes findings from my past research, conducted in London Trusts. This study found that ethnic minority staff were more likely to experience and witness bullying and discrimination. Such experiences were associated with poor health outcomes, low job satisfaction, and increased sick leave.

The toll on NHS staff health from negative workplace experiences is significant. Our latest findings indicate a link between adverse working conditions and poorer levels of physical and mental health. The unavailability of PPE was associated with an approximately twofold increase in depression and anxiety. Harassment and discrimination were associated with a threefold increase.

Overall, 23% of our survey participants reported symptoms suggesting probable depression, while 18% appeared to have probable anxiety. And 23% experienced medium-to-severe somatic symptoms – chronic physical symptoms that coincide with emotional problems.

How to address these issues

Our study also identified that awareness of employment rights is essential to the mental health of ethnic minority staff. For example, the survey showed an association between involvement in redeployment decisions and better mental health outcomes. One recommendation is that all NHS staff should be educated on their employment rights and provided with knowledge of, and access to, available support systems.

This would ensure they are able to advocate for themselves and their colleagues. It would offer more opportunities to engage in discussions, provide feedback, and question decisions concerning their working conditions without fear of negative consequences.

Our team’s previous research found that ethnically minoritised NHS staff often feel disempowered and fear the repercussions of speaking out against their working conditions. These concerns can be grave enough that affected staff transfer to different teams or quit the NHS altogether to escape these organisational inequities.

Innovative approaches to training, such as those developed through our Tides project, highlight a forward path. We have pioneered the use of virtual reality (VR) training scenarios to simulate the experiences of ethnically minoritised staff. This approach is designed to promote empathy and deeper understanding of their challenges and perspectives.

By immersing NHS managers and senior leaders in these realistic scenarios, VR training can offer a powerful means to combat racism and discrimination.

Initial piloting of this approach indicates that it can alleviate the emotional burden on ethnic minority staff by removing the need for them to recount traumatic experiences. It also paves the way for meaningful, experiential learning.

Public health imperative

Our research underscores the importance of addressing racism and racial discrimination in the NHS not merely as a matter of ethics, but as a public health imperative.

Now is the time for structural change that addresses the systemic roots of racism within the NHS. We need clear rules that hold all levels of management accountable. Leadership within NHS trusts also needs to start taking responsibility for actively combating racism. This should involve more detailed annual reports, specific targets for improvement, and the sharing of data, strategies and outcomes with regulatory bodies such as the Care Quality Commission to ensure transparency.

We also need clear and open ways for staff to report racism without fear of backlash. Providing training for all NHS staff on how to recognise, challenge and report racism and harassment is essential. Anti-racism resources, such as those developed by the NHS’s chief nursing and chief midwifery officers, can support staff and drive meaningful change.

Reflecting on the lessons learned from the pandemic, the path to recovery for the NHS lies in embracing practices that ensure equity for all its staff. This is not just about rectifying past oversights but about building a stronger, more inclusive health service that values and protects its workforce, regardless of their ethnic background.

Rebecca Rhead receives funding from the Economic and Social Research Council and the Wellcome Trust. She has also previously received funding from the Medical Research Council.

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For many years, it wasn’t the economy that determined voting behaviour in Turkey. The country’s president, Recep Tayyip Erdoğan, won almost every election he contested despite a deteriorating economic outlook.

This is commonly explained by the importance of identity politics in a country that has been polarised by the policies of Erdoğan’s ruling Justice and Development (AK) Party over its 22 years in power.

However, Erdoğan’s streak came to a screeching halt on Sunday March 31 following Turkey’s local elections. His AK Party lost the popular vote for the first time since 2002 and the main opposition group claimed victory in key cities including Istanbul and Ankara.

The reason why this time was different lies in the huge accumulated costs from years of policy mistakes that are now beginning to bite in a serious way.

So, what was the economic outlook as the country went to the polls?

On March 21, Turkey’s central bank raised interest rates unexpectedly to 50%. The move was the latest in a succession of rate rises that have followed Erdoğan’s re-election as president in May 2023. It was viewed as evidence of the central bank’s determination to fight runaway inflation that is hovering close to 70%.

The rising interest rates have been widely applauded as a much-needed reversal from the unorthodox monetary policy that had gone on far too long. Erdoğan’s unconventional policy stance arose from his deep-held conviction that raising interest rates would increase inflation rather than reduce it.

The pandemic and Russia’s invasion of Ukraine caused inflation to soar worldwide. While almost every central bank raised interest rates in response, Turkey went on an interest rate cutting spree. Keeping rates artificially low contributed to the rise in domestic inflation, and has made Turkey an inflation champion on a par with Argentina and Venezuela.

Decoupling from other emerging economies

Emerging markets have been surprisingly resilient in the face of the global financial squeeze. Unlike in the past, many emerging economies have avoided huge fluctuations in their exchange rates, have not been subject to debt distress and have managed to keep inflation under control.

One reason for this is the success of emerging economies in improving their policy frameworks, particularly by enhancing the independence of their central banks. More specifically, central banks in these countries have significantly improved their communication and transparency, and have become much better at forecasting inflation. As such, countries including Chile, Czech Republic and South Africa have outperformed their counterparts in advanced economies.

Sadly, Turkey was an outlier in this sphere. The country has completely ditched the independence of its monetary policy to such an extent that its central bank has had six different governors in the last five years.

Politics has also played a disproportionate role in the making of economic policy. Changes to the Turkish constitution, which were put in place in 2018, gave Erdoğan significant executive powers to push for very generous spending ahead of the 2023 presidential elections.

Minimum wage rose substantially and costly pension schemes and subsidised housing projects were put in place. This expansion in public spending naturally contributed to the inflationary pressures that were already brewing.

Turkey’s outlier position in loose monetary policy, cutting rates between 2021 and 2023 while everyone else had been tightening, is the very reason why its central bank is now having to push rates up while others are just starting the easing cycle.

Why does this matter?

Getting monetary policy wrong matters for most countries. But it matters particularly for countries like Turkey that are highly open to trade and financial flows, and for whom exchange rate movements are a crucial source of fluctuation in the domestic economy.

One of the biggest losers of Erdoğan’s unorthodox monetary policy has been the Turkish lira. Over the past six years, the value of the lira has fallen dramatically against the US dollar. In January 2018, you would have needed to part with 3.76 liras to purchase one US dollar. Today, this figure stands at 31.9 liras.

Large fluctuations in the value of the lira matter for the Turkish economy for several reasons.

First, a significant part of Turkey’s imports are inputs used in the production process, particularly of vehicles, machinery and mechanical appliances that make up nearly half of the country’s exports. Any fall in the value of the lira will push up input costs and hence prices, reducing the competitiveness of the country’s exports.

Second, Turkey imports a substantial part of its energy from abroad. In much the same way, any depreciation of the lira will make it more expensive to import energy.

Third, Turkey is sitting on substantial external liabilities in foreign currency terms. This makes the depreciation of the lira even more costly. Any loss in its value magnifies the amount of resources required to repay a given level of foreign currency liabilities.

Moving forward

Turkey’s return to more orthodox economic policy is good news. But it is so overdue that even the sharp reversals in policy have not been sufficient to turn the tide on its economy, especially in the fight against inflation. Persistent inflationary pressures have forced citizens to increase their holdings of foreign currency, which has put further pressure on the lira.

Facing a slowdown in foreign capital inflows, the authorities have had to burn significant amounts of foreign currency reserves to prevent the lira from depreciating further. The sharp rise in interest rates on March 21 should be seen in a similar vein and as the price the country is having to pay for its past policy mistakes.

More importantly, it has been nearly a year since Turkey returned to more conventional economic policy and there is no plan for a restructuring of the economy with proper institutional reform at its core. If proof is needed as to whether robust and independent policy institutions benefit economic performance, you need look no further than the recent resilience of other emerging economies.

Brazil, for example, hasn’t only rebounded strongly from the pandemic. It has managed to control inflation and boasts one of the best performing currencies in the world.

Gulcin Ozkan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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