While market expectations for an additional Bank of Japan rate hike are rising, the yen remains in the high ¥150s to the dollar. Persistent doubts about the Bank of Japan are believed to lie behind this.
Views are growing that the probability of the Bank of Japan raising interest rates again before year-end is increasing, making an additional rate hike in December increasingly likely. The market expects the Bank of Japan's policy rate to be raised by 0.25 percentage points from its current level, potentially reaching around 1.50%.
The yen remains in the high ¥150s to the dollar and has not strengthened despite rising expectations for a rate hike.
A major reason rate hike expectations have strengthened is that the Bank of Japan itself accelerated the pace of rate hikes at its September meeting, leading the market to focus increasingly on a once-every-three-months pace. Until then, the market had mainly expected a rate hike once every six months. Persistent market doubts about the Bank of Japan lie behind this.