Investing.com– The Japanese yen showed little movement on Tuesday, despite Bank of Japan (BOJ) Deputy Governor Ryozo Himino hinting at a potential hike at its upcoming policy meeting.
Himino suggested the central bank may consider raising rates, citing sustained wage growth and expectations for a clearer outlook for US policy after President-elect Donald Trump’s inaugural address later this month.
The yen pair rose 0.1% to 157.62 yen on Tuesday.
In recent months, the BOJ has been adjusting its monetary policy to deal with rising inflation. In March of last year, it abolished the policy of negative interest rates, and by July it increased the short-term interest rate to 0.25 percent.
The aim of these measures is to achieve a stable inflation target of 2%, supported by strong wage growth and a weakening yen, which have contributed to higher import costs.
Despite these movements, the yen against the US dollar remained relatively stable, reflecting market skepticism about the likelihood of an imminent rate hike.
Analysts suggest that while the BOJ is signaling a move 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 terminal rate of 0.75%.
The BOJ’s next policy meeting is scheduled for January 23 and 24, where new growth and price projections will be discussed.
