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BOJ preps markets for near-term hike as weak yen overshadows politics
The Bank of Japan may raise rates to 0.75% by March, responding to inflation risks from a weakening yen and reduced political resistance, sources and polls indicate.
- On May 30, 2024, the Bank of Japan signalled markets it is preparing for a possible interest rate hike as soon as next month, reviving hawkish language on inflation risks from a weak yen.
- After a key meeting last week between Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda, immediate political objections to rate hikes eased despite complications from Takaichi's inauguration last month.
- Market strategists noted that Kazuyuki Masu said the timing was 'nearing', and Naomi Muguruma stated, 'It's clear the BOJ is intentionally dropping signals now to ensure it won't surprise markets in December.'
- Projections and government comments together suggest the BOJ's policy rate will reach 0.75% by March next year, with Satsuki Katayama signaling no objection as the yen hit 10-month lows.
- Another key factor is the Fed meeting that ends on December 10, as divisions on rate cuts could sway the dollar and its effect on the yen, pressuring the BOJ to hike next month amid warnings from Takaichi's reflationist advisers.
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6 Articles
6 Articles
BOJ preps markets for near-term hike as weak yen overshadows politics
The Bank of Japan is preparing markets for a possible interest rate hike as soon as next month, sources say, reviving previous hawkish language as worries about sharp yen declines return and political pressure for the bank to keep rates low fades.
·United Kingdom
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Total News Sources6
Leaning Left1Leaning Right0Center4Last UpdatedBias Distribution80% Center
Bias Distribution
- 80% of the sources are Center
80% Center
L 20%
C 80%
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