The market bets that the Bank of Japan will not raise interest rates next week, and the yen has set the longest consecutive decline record since June
Due to traders betting that the Bank of Japan will not raise interest rates next week, the yen has recorded its longest consecutive decline against the US dollar since June, falling 0.6% to 153.48 yen on Friday, the lowest level since November 26. The yen has fallen for five consecutive days and is on track for its worst week in over two months. Market bets on interest rate hikes have decreased, with the current probability of a rate hike at 16%
The Zhitong Finance APP noted that due to traders betting that the Bank of Japan will not raise interest rates next week, the yen has recorded its longest consecutive decline against the US dollar since June.
The yen continued its downward trend on Friday, falling 0.6% to 153.48 yen per dollar, the lowest level since November 26. The yen has fallen for five consecutive days and is on track for its worst week in over two months.
It is reported that policymakers at the Bank of Japan believe there is no loss in waiting until January or later to raise interest rates, as the risk of inflation overshooting is limited. They are willing to raise interest rates next week based on economic data and market developments.
The money market has reduced bets on an interest rate hike this month, with the current probability of a rate increase at 16%. A week ago, the probability was 64%.
The quarterly Tankan report released by the Bank of Japan on Friday showed that confidence among large Japanese companies remains optimistic, but this data did not affect interest rate expectations.
Bank of America foreign exchange and interest rate strategist Adarsh Sinha stated, "We believe the risk is tilted towards yen depreciation. The Bank of Japan is in a wait-and-see mode as it assesses future U.S. economic policies."