BOJ reportedly sees limited case for consecutive hikes absent a sharp rise in upside inflation risks
Updated
Summary
Reports said the Bank of Japan saw limited justification for consecutive interest-rate hikes unless there were clear signs of a sharp rise in upside inflation risks, while leaving open the possibility of a rate increase in December.
Governor Kazuo Ueda said policymakers would continue to closely monitor bond yields and reiterated that long-term interest rates should be determined by market forces.
Why it matters
The yen weakened to around 158.5 per dollar on Wednesday, giving back gains from the previous session. Separately, Japan’s 10-year government bond yield steadied around 3%, holding a recent decline.
The source attributed additional pressure on the yen to rising oil prices amid escalating hostilities between Saudi Arabia and Iran-backed Houthi rebels and concerns about potential Middle East supply disruptions. Oil prices extended gains, with the source also describing supply-disruption concerns as keeping inflationary pressures elevated.