Societe Generale: BoJ Rate Hike Marks Floor for Yen Gains
Analysts at Societe Generale say the Bank of Japan's rate hike to 1.0% is the bottom of the neutral range and that new language on upside inflation risks supports further tightening, pointing to medium-term gains for the Japanese yen.
Societe Generale’s Jin Kenzaki and team view the Bank of Japan’s recent rate increase to 1.0% as merely the lower bound of the neutral policy range. They note that the BOJ’s updated language now emphasizes upside risks to inflation, which in their view justifies additional rate hikes.
The analysts argue that this policy trajectory should support the Japanese yen over the medium term. The shift in the BOJ’s communication signals a more hawkish stance, potentially narrowing interest rate differentials with other major currencies.
Source: FXStreet Forex News