BOJ Policy Board member Takata (高田) was reported to have mentioned the possibility of a rate hike exceeding 0.25 percentage points, putting today’s 30-year JGB auction in focus. Developments in the US market and differences between Japanese and US interest-rate conditions are also covered.
A speech by BOJ Policy Board member Takata (高田), rather than the BOJ governor’s remarks on 2 September, was reported to have addressed the need for the BOJ to respond flexibly not only to the pace of rate hikes but also to their magnitude. This has revived expectations of an early additional rate hike by the BOJ.
In the US, the August ADP employment report came in below market expectations, with private-sector employment rising by just 38,000 from the previous month. This, together with remarks by the president of the Federal Reserve Bank of New York, Williams, was said to have reduced expectations of a rate hike.
In the markets, dollar-yen temporarily declined, while the Nikkei 225 fell sharply on the impact of higher oil prices and high interest rates. The S&P 500 rebounded, while US long-term yields rose at one point to around 4.81%.
Today’s focus is the 30-year JGB auction. Demand is expected despite the high yield, and the outcome of the auction could affect overseas markets.