Nomura Securities said the BOJ could raise rates by 0.25 percentage points at its September meeting, and could deliver consecutive hikes in October and December if the yen continues to weaken.
Nomura Securities Chief FX Strategist Goto Yujiro (後藤 祐二朗) said a 0.25 percentage-point increase in the policy rate at the September monetary policy meeting would be appropriate. He also said the BOJ could raise rates consecutively in October and December if renewed yen weakness drives the dollar toward ¥160.
The yen is currently trading around ¥156 against the dollar, while expectations for a correction of the yen’s decline are strengthening. Speculation that GPIF may change its asset allocation was also cited as a factor that could push up the yen.
There has been speculation that pressure from US Treasury officials could influence the BOJ’s decision. The overnight index swap market has priced in a September rate hike, and some expect 1 additional hike by January.
At a press conference, BOJ Governor Ueda Kazuo (植田 和男) indicated that rate hikes would be discussed at every meeting, including this month, and did not seek to dispel expectations of a September hike. Hawkish board member Takata Hajime (高田 創) has also not ruled out the possibility of a large rate hike or consecutive hikes.