BOJ Has Chance to Support Yen with September Rate Hike
Dow Jones
Aug 19
0436 GMT - With the yen gradually weakening again, the Bank of Japan has the chance to support the currency by delivering a hawkish hike at its next meeting in September, says Joey Chew, head of Asia FX research at HSBC. Markets are pricing in 80 bps of rate hikes over the next 12 months to 1.8%. Meanwhile, HSBC Economics now expects two more rate hikes by the BOJ in September and 1Q 2027, taking the terminal rate to 1.5%. HSBC had previously projected just one rate increase in December. It says the key to a sustained yen recovery rests on more attractive real interest rates, reduced fiscal concerns and a pivot by residents from foreign to domestic assets, Chew says in a note. The dollar is at 159.35 yen, according to LSEG data.
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