Japanese Yen: Is the BoJ signalling an inflation milestone ahead of December’s decision? – Commerzbank

The Japanese Yen could receive modest near-term support from any further signals by Governor Kazuo Ueda, according to Commerzbank’s Michael Pfister. Following September’s rate hike, the Bank of Japan (BoJ) kept rates on hold, while signalling a hawkish stance by indicating that underlying price pressures have reached the 2% target. Another increase in December is considered increasingly likely and is almost fully priced in.

Is a December hike drawing closer after the BoJ holds rates?

"As expected, a few hours ago the Bank of Japan left its key interest rate unchanged. Anything else would have been a major surprise, given the rate hike in September."

"Although officials have recently suggested that the pace of rate hikes could accelerate, they are unlikely to act quite so quickly. However, the BoJ did send a hawkish signal: For the first time, it was indicated that underlying price pressures had reached the 2% target."

"Nevertheless, following this indication, the further interest rate hike in December - which we had also anticipated - is likely coming closer."

"If the BoJ Governor, Kazuo Ueda, provides further clues on this matter at the press conference at 6:30 UK time, the yen could strengthen slightly once again, even though the December move is now almost fully priced in."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)