• BOJ may hike rates again; yen peaks at 145.61 against USD amid global currency downtrends.
  • BOJ’s Ueda confirms rate strategy as economic stability supports Japan’s growth.
  • Post-July BOJ rate hikes, majority economists foresee another increase by year-end.

Bank of Japan (BOJ) Governor Kazuo Ueda reiterated on Tuesday that the central bank may continue raising interest rates if economic conditions and inflation align with its expectations. 

Read CRYPTONEWSLAND on google news

This declaration came through a document submitted to a government panel led by outgoing Prime Minister Fumio Kishida, where Ueda reviewed the outcomes of the BOJ’s July policy decision. His remarks further strengthened the yen, contrasting the general downtrend among G-10 currencies.

BANK OF JAPAN FURTHER HIKES ARE A SIGNIFICANT RISK FOR GLOBAL MARKETS:

Bank of Japan Governor Kazuo Ueda reiterated Tuesday that the BoJ will continue raising rates if the economy and prices perform as expected by the central bank.

USDJPY down 0.7% on the news. pic.twitter.com/rB0pFu2iUx

— Global Markets Investor (@GlobalMktObserv) September 3, 2024

Impact on Currency and Market Predictions 

Following Ueda’s statements, the yen saw a notable increase, peaking at 145.61 against the dollar by late afternoon in Tokyo. This rise is particularly significant as it counters the recent weakening trend observed in other major global currencies. 

Market analysts highlight that Ueda’s consistent policy stance is crucial amid the volatile economic climate caused by the BOJ’s previous rate adjustments . A survey of economists during the post-market downturn showed that a majority still anticipate an additional rate increase by the end of this year, with a significant portion pointing towards December.

Economic Indicators and Future Outlook

Economic Resilience Governor Ueda emphasized that Japan’s economic environment remains conducive to growth despite the rate hikes in July, with real interest rates still markedly negative. He argued that the current monetary conditions robustly support ongoing economic activities, suggesting a careful but determined approach to future policy adjustments.

The BOJ governor’s firm stance comes when market experts, such as Arif Husain from T. Rowe Price, warn of potential further volatility in the financial markets. Meanwhile, Pacific Investment Management Co. (Pimco) predicts the next rate hike as early as January, advocating for investments in long-term government bonds, which are becoming more appealing as yields rise.

Collaboration and Communication in Economic Policy

During the same meeting, four private-sector government panel members, including Masakazu Tokura of the business lobby Keidanren, proposed the need for steady macroeconomic management. 

This comes after last month’s market disturbances, emphasizing the importance of ongoing collaboration and clear communication between the BOJ and government officials to maintain market stability.

disclaimer read more

Crypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.