Home / Business and Economy / Yen Weakens, BOJ Rate Hike Eyed for December
Yen Weakens, BOJ Rate Hike Eyed for December
26 Nov
Summary
- A former central bank executive believes a December rate hike is probable.
- The yen's current exchange rate against the dollar is a key factor.
- No significant negative news is needed for the BOJ to raise rates.
The likelihood of the Bank of Japan implementing a benchmark interest rate hike in December has significantly increased. This projection comes from Kazuo Momma, a former executive director at the central bank, who cited the yen's recent depreciation as a primary driver.
Momma indicated that with the yen hovering around 156.80 against the dollar, the probability of a rate adjustment next month is substantial. He further suggested that the BOJ would not need to await more definitive economic signals like wage growth or inflation.
This anticipated move by the Bank of Japan suggests a potential shift in monetary policy, influenced by currency market dynamics. The stability of the yen at its current level is seen as a sufficient condition for the central bank to consider raising rates.
