Japan’s authorities were in the spotlight at the beginning and end of the week, as the Ministry of Finance was suspected to have intervened twice in currency markets to stem the rapid decline of the yen; a move not seen since the end of 2022. The yen has been under pressure as US interest rates have climbed and Japan’s have stayed near zero but surged against the dollar early on Thursday; timing which ensured the authorities got the most bang for its buck as it coincided with US markets being closed and just hours after the Fed’s rate-setting meeting had finished.

Mark Dowding of BlueBay Asset Management believes the Bank of Japan needs to adjust its mindset and recognise that its monetary policy decisions are driving the yen. “With the Japanese currency undermined by excessively accommodative monetary policy, the impact of intervention may prove short-lived. Commonly, we have always seen that intervention can only smooth moves and a change in the directional trend requires a change in BoJ policy.”

In other news, Amazon and Apple were the last two tech giants to reveal their first-quarter results. Amazon’s profits more than tripled, driven by growth in advertising, which surged 24%, and cloud computing.

Apple shares have recently underperformed the other big-tech companies, falling 10% this year in the face of weak iPhone demand and tough competition from Chinese brands such as Huawei. On Thursday, the world’s second most valuable company announced quarterly results that beat modest expectations and a 4% increase in its dividend. It also authorised a share buyback of $110 billion – the largest in the company’s history.

All the major US equity indices rounded off April by recording their first monthly percentage losses since October and were joined in the red by global counterparts. However, the UK’s FTSE 100 index bucked the trend after its run of record closes, rising 2.4%.

The influence of US stocks, and the Magnificent Seven in particular, on recent global equity returns has been huge. US stocks are reckoned to have accounted for 80% of total returns from the MSCI World index since 2020 in dollar terms, whilst the big tech stocks have driven 60% of the S&P 500 returns over the last year.

In advance of the US Federal Reserve rates announcement, investors digested news that US labour costs had increased more than expected in the first quarter, adding to the darkening inflation picture. Faster wage growth could further stoke inflation if employers pass on higher labour costs to consumers. Even before such potential impact, US consumer confidence deteriorated in April, with worries about the labour market and higher prices for food and fuel top of consumers’ list of concerns.

Most markets in Europe and Asia were closed on Wednesday for the May holiday, ahead of the Fed’s policy decision. It was no great surprise when the Fed held rates steady and gave no signal that it plans to lower them anytime soon. Whilst still leaning toward eventual rate cuts, the central bank made clear that the start of 2024 has done little to give it confidence that inflation was falling.

“The difference between the United States and other countries that are now considering rate cuts is they’re just not having the kind of growth we’re having,” commented Fed Chair Jerome Powell. “We can be patient.”

However, the overwhelming reaction in markets was a sense of relief that the Fed shot down talk that interest rates may actually need to go up again. The dovish tone sent stocks higher across the world.

The resilience of US activity, and its importance to the global economy, was underlined as the Organisation for Economic Cooperation and Development (OECD) upgraded its outlook for global growth for this year and 2025. It said that lingering sluggishness in Europe and Japan was being offset by the US, whose growth forecast for this year was hiked to 2.6% from a previous estimate of 2.1%.

The OECD also said it expected the UK economy to see the slowest growth of the largest developed nations in 2025, with only Germany seeing slower expansion this year.

The case for a June interest rate cut by the European Central Bank was strengthened by news that the eurozone bounced back from its shallow recession, boosted by better-than-expected performance by its ‘big four’ economies in the first three months of the year. The single currency area posted growth of 0.3%, its best performance since the third quarter of 2022. Germany and France grew by 0.2%, while Italy and Spain posted growth of 0.3% and 0.7% respectively.

Falling inflation has helped boost activity and new figures showed that eurozone inflation held steady at 2.4% in April, further solidifying prospects for a rate cut. Core inflation, which strips out volatile food and energy prices, slowed to 2.7% from 2.9%.

The last action of the week saw the release of the closely watched US employment figures. Job growth slowed more than expected in April and the unemployment rate rose to 3.9% from 3.8%. Global shares ended the week in buoyant mood on hopes that evidence of some weakness in the jobs market would give the Fed more reason to cut interest rates later in the year. Markets moved to price in two cuts of 0.25% points this year, compared to just one being forecast before the job numbers were released.

Inheritances can be life changing. An inherited lump sum can send children or grandchildren to great schools, or on great gap years. They can mean a mortgage paid off early, or a new business launched.

Currently, in the UK, IHT is usually charged at a rate of 40% on the portion of the estate over a £325,000 threshold, or up to £500,000 if it includes a family home worth at least £175,000 which is passed on to children, grandchildren or another direct lineal descendant.

Not everyone is aware that death-in-service benefits or workplace pension lump sums can help your family avoid a high IHT bill. These are generally not counted as part of your estate – so you don’t pay IHT on them.

But while that sizeable amount of money won’t be considered part of your estate, it will eventually be counted as part of your beneficiary’s estate, when they die. At that point, IHT will be payable.

Although intended to help your family financially after your death, a lump sum payment from a death-in-service benefit or a workplace pension pay out, can actually be a mixed blessing.

Death-in-service benefits are often multiples of salary, so even if people don’t currently have any issues with IHT, a payment from one of these schemes can push their estate over the nil rate band (£325,000) threshold. Suddenly, there’s an IHT liability where none existed before.

There is a way to protect this money for your family for all generations, however – by setting up a Legacy Preservation Trust (LPT).

Trusts can play an important role in legacy planning. And a Legacy Preservation Trust or LPT, does exactly what it says on the tin – preserves your legacy for the longer-term, so money can pass tax-efficiently through several generations of your family.

A SJP Legacy Preservation Trust is designed to hold assets such as death-in-service and pension death benefits so that your beneficiaries can access the money if they need to. But the money itself sits outside your estate, protected from IHT. If or when the beneficiaries draw on the money, there may be various tax liabilities to consider.

Trusts and legacy planning can seem complex – and of course, you want to be certain you’re doing the right thing for your family, since you won’t be around to put things right. We recommend that you always take financial advice when you’re starting to think about inheritance and legacy planning.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

“I think it was Harold Wilson who said a week is a long time in politics…we have several months now before the next general election.”

Work and Pensions Secretary Mel Stride appears to rule out a snap general election following local elections that saw Labour and Liberal Democrats make a number of gains.