Japan's top currency diplomat Atsushi Mimura escalated his warning against sharp yen falls yesterday
TOKYO – A dollar rally triggered by Republican Donald Trump's victory in the U.S. presidential election could heighten pressure on the Bank of Japan to raise interest rates as soon as December to prevent the yen from sliding back toward three-decade lows.
While a weak yen gives exports a boost, it has become a headache for Japanese policymakers by pushing up fuel and food import costs and in turn hurting consumption. One nightmare scenario for policymakers would be a renewed plunge in the yen towards the three-decade trough near 162 to the dollar hit in July - a move that prodded the BOJ to raise interest rates to 0.25% on July 31.
"Politicians don't want a weak yen, so even those who have urged the BOJ to be cautious about raising rates could nod to hikes if yen falls accelerate," said Tsuyoshi Ueno, senior economist at NLI Research Institute. "In that sense, the weak yen could prod the BOJ into steady rate hikes."The BOJ exited a decade-long radical stimulus in March and raised short-term interest rates to 0.
Renewed yen falls may heighten the chance of the BOJ acting in December, given the BOJ's sensitivity to the currency's weakness that pushes up import costs, analysts say.
پاکستان تازہ ترین خبریں, پاکستان عنوانات
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