Nagahama Backs BOJ Rate Hikes After Yen Hits Nearly 40-Year Low
Updated
Updated · goldbroker.com · Jul 3
Nagahama Backs BOJ Rate Hikes After Yen Hits Nearly 40-Year Low
3 articles · Updated · goldbroker.com · Jul 3
Summary
Nagahama said moderate Bank of Japan rate hikes are needed to correct excessive yen weakness, calling the June increase appropriate and warning delays would further hurt households.
Nearly 40-year yen lows have pushed imported costs higher, signaling a shift in Japan’s policy debate from mainly supporting growth toward defending household purchasing power and the currency.
Japanese 30-year yields have been rising while U.S. yields stabilize, narrowing the gap that historically supports a stronger yen, yet currency markets have not fully reflected that bond-market signal.
That disconnect raises the risk of faster BOJ tightening or renewed FX intervention, especially if oil prices rebound and worsen Japan’s import bill.
A sharper tightening cycle could unwind yen-funded carry trades that have financed global assets for years, draining liquidity well beyond Japan.