MUFG Warns Yen May Weaken Despite 80% BOJ September Hike Odds
Updated
Updated · investinglive.com · Aug 24
MUFG Warns Yen May Weaken Despite 80% BOJ September Hike Odds
3 articles · Updated · investinglive.com · Aug 24
Summary
MUFG says near-term yen risk is still skewed weaker even with markets pricing about an 80% chance of a Bank of Japan rate hike in September.
80% hike odds have not triggered yen buying, which MUFG says shows traders are pressuring the BOJ rather than responding to clear guidance from policymakers.
USD/JPY is already sitting just below 160, leaving the currency vulnerable if the BOJ pushes back on market pricing or delivers less tightening than investors expect.
July CPI acceleration, roughly 50% odds of two hikes by year-end, and higher long-dated JGB yields have lifted tightening bets, but the Nikkei's weak follow-through has not provided offsetting support for the yen.
With BOJ communication set to increase next week ahead of the mid-September meeting, MUFG says only a hawkish surprise may keep the yen steady.