Japanese yen eases despite vice governor’s BOJ rate hike hints via Investing.com
Investing.com– The Japanese yen showed little movement on Tuesday, despite Bank of Japan (BOJ) Deputy Governor Ryozo Himino hinting that a hike is likely at the upcoming policy meeting.
Himino suggested the central bank might consider raising rates, citing continued wage growth and expectations of a clearer US policy environment after President-elect Donald Trump’s inaugural address later this month.
The yen pair rose 0.1% to 157.62 yen on Tuesday.
In recent months, the BOJ has been adjusting its monetary policy to deal with rising inflation. In March last year, it ended its negative interest rate target, and in July, it raised the short-term policy rate to 0.25%.
These measures aim to achieve a stable inflation target of 2%, supported by strong wage growth and a weak yen, which has contributed to higher import costs.
Despite these developments, the yen’s exchange rate against the US dollar remained stable, reflecting market skepticism about the possibility of an imminent rate hike.
Analysts suggest that while the BOJ is signaling a shift towards a policy stance, uncertainty surrounding global economic conditions and household income volatility may lead to a more cautious approach.
Barclays (LON:) expects the central bank to start raising rates in March and October, with a final rate of 0.75%.
The BOJ’s next policy meeting is scheduled for January 23-24, where new growth and rate projections will be discussed.
