BOJ Faces Pressure to Lift Rates to 1% as Yen Stays Above 160
Updated
Updated · Reuters · Jun 9
BOJ Faces Pressure to Lift Rates to 1% as Yen Stays Above 160
3 articles · Updated · Reuters · Jun 9
Summary
Swap markets now price a 93% chance the Bank of Japan will raise its policy rate by 25 basis points to 1% at its June 15-16 meeting, up from about 80% in May.
The shift reflects a yen stuck near 160.14 per dollar and stronger U.S. jobs data that boosted expectations for a Federal Reserve hike by December instead of earlier rate-cut bets.
Markets also see a 92.5% chance of a second BOJ increase to 1.25% by December, with analysts focused on whether the bank adopts a more hawkish message on further tightening.
Japan has already spent 11.7 trillion yen, or about $73 billion, defending the currency since the yen first broke past 160 on April 30, but economists say intervention may be less effective if U.S.-Japan rate gaps widen further.