MUFG on the Bank of Japan outlook, a conditional view:
- “If financial markets stabilize and the pace of yen gains slows, then at least one more BOJ hike still appears likely in the current fiscal year.”
MUFG cite the Bank of Japan Summary of Opinions (published yesterday):
- summary sent a clear signal for further interest-rate rises
- showed some board members described the policy rate as significantly low and highly accommodative even after it was raised to 0.25%
MUFG argue that further rate hikes from the Bank of Japan would support further yen gain potential.
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USD/JPY update (back of envelope lines are mine ... makes me think it heading lower, though I don't like that view):
