Investing.com — The Japanese yen showed minimal movement on Tuesday despite Bank of Japan (BOJ) Deputy Governor Ryozo Himino signaling a possible rise at the upcoming policy meeting.
Himino suggested the central bank may consider raising rates, citing continued wage growth and expectations of a clearer U.S. policy landscape after President-elect Donald Trump’s inaugural address later this month.
The yen pair rose 0.1% higher to 157.62 yen on Tuesday.
In recent months, the BOJ has adjusted its monetary policy to tackle rising inflation. In March last year, the country ended its negative interest rate policy and by July it had raised short-term interest rates to 0.25%.
These measures are aimed at achieving a stable inflation target of 2%, supported by robust wage growth and a weakening yen, which have contributed to higher import costs.
Despite these developments, the yen’s exchange rate against the US dollar remained relatively stable, reflecting market skepticism about the likelihood of an upcoming rate hike.
Analysts suggest that while the BOJ signals a shift toward policy normalization, uncertainties surrounding global economic conditions and domestic wage dynamics may lead to a cautious approach.
Barclays (LON:) expects the central bank to implement interest rate hikes in March and October, with a final interest rate of 0.75%.
The BOJ’s next policy meeting is scheduled for January 23 and 24, where new growth and price forecasts will be discussed.
