Japanese yen gains despite BOJ deputy governor hints at rate hike By Investing.com

Investing.com – The Japanese yen showed little movement on Tuesday, although Bank of Japan (BOJ) Deputy Governor Ryozo Himino hinted that it could rise at the upcoming policy meeting.

Himino suggested the central bank may consider raising rates following President-elect Donald Trump’s inauguration speech later this month, citing continued wage growth and a more transparent U.S. policy.

The yen pair rose 0.1% to 157.62 yen on Tuesday.

In recent months, the BOJ has been adjusting its monetary policy to address rising inflation. It ended its negative interest rate policy in March last year and increased the short-term policy rate to 0.25% in July.

These measures are aimed at achieving a stable 2% inflation target, aided by strong wage growth and a weakening yen, which has contributed to higher income spending.

Despite these developments, the yen’s exchange rate has remained relatively stable against the US dollar, reflecting market skepticism of a possible rate hike in the near future.

Analysts suggest that while the BOJ may be signaling a shift toward policy normalization, uncertainties over global economic conditions and domestic wage dynamics may lead to a cautious approach.

Barclay (LON: ) expects the central bank to implement rate hikes in March and October, with a target rate of 0.75%.

The BOJ’s next policy meeting is scheduled for January 23-24, where new growth and price forecasts will be discussed.