Yen Strengthens on Hawkish BOJ Signals
The Japanese yen strengthened toward 158 per dollar on Monday, recovering some of last week’s losses as hawkish comments from Bank of Japan officials strengthened expectations for additional interest rate hikes. BOJ Chief Economist Seisaku Kameda indicated that the central bank is likely to raise rates in December and continue tightening monetary policy next year, potentially bringing borrowing costs closer to 2%. BOJ Governor Kazuo Ueda also noted that underlying inflation is expected to remain near the central bank’s 2% target, while acknowledging the presence of “some upside risks.” Meanwhile, Finance Ministry data confirmed that Japanese authorities intervened in the foreign exchange market in late July to support the yen, purchasing a record ¥15.4 trillion over three days. Japan and the US had previously confirmed their coordinated intervention on July 31, marking their first joint currency market operation to strengthen the yen since 1998.
The Japanese yen strengthened toward 158 per dollar on Monday, recovering some of last week’s losses as hawkish comments from Bank of Japan officials strengthened expectations for additional interest rate hikes. BOJ Chief Economist Seisaku Kameda indicated that the central bank is likely to raise rates in December and continue tightening monetary policy next year, potentially bringing borrowing costs closer to 2%.
BOJ Governor Kazuo Ueda also noted that underlying inflation is expected to remain near the central bank’s 2% target, while acknowledging the presence of “some upside risks.” Meanwhile, Finance Ministry data confirmed that Japanese authorities intervened in the foreign exchange market in late July to support the yen, purchasing a record ¥15.4 trillion over three days. Japan and the US had previously confirmed their coordinated intervention on July 31, marking their first joint currency market operation to strengthen the yen since 1998.