The Bank of Japan could accelerate interest rate rises, potentially supporting the yen, MUFG Bank's Lee Hardman says in a note. Japan's rate market looks underpriced for further tightening, he says. "We believe that the BOJ will increasingly take that policy needs to be tightened again sooner to address upside inflation risks." MUFG expects the policy rate to reach 1.50% by January 2027 from 1.00% currently with the next hike in September. LSEG data show just four basis points of rate rises priced for September. A faster pace of tightening would help address concerns the BOJ is constrained by fears over the burden of higher rates on servicing government debt, he says. The dollar rises 0.5% to 162.24 yen. (renae.dyer@wsj.com)
Dow Jones Newswires
Japanese Yen Would Benefit From Faster Pace of Rate Rises — Market Talk
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The Bank of Japan could accelerate interest rate rises, potentially supporting the yen, MUFG Bank's Lee Hardman says in a note. Japan's rate market looks underpriced for further tightening, he says. "We believe that the BOJ will increasingly take that policy needs to be tightened again sooner to ad…