BOJ Seen Raising Rates to 1.25% on Sept 18, Yen Jumps 1.5%
The Bank of Japan is expected to consider a 25-basis-point rate hike to 1.25% at its two-day meeting ending September 18, responding to upside inflation risks. Stronger service prices and a persistently weak yen support the move, while the economy broadly aligns with forecasts, ruling out a larger 50-basis-point increase. The yen strengthened about 1.5% against the dollar to 156.3, its best daily performance in about a month.
The Bank of Japan plans to consider raising its benchmark interest rate by 25 basis points at the two-day meeting concluding September 18, in response to upside risks to prices. Inflation risks are tilted to the upside, with rising service prices and a persistently weak yen strengthening the case for action. As the economy is broadly in line with the outlook, a larger increase of 50 basis points is not being considered.
On the day, the yen appreciated about 1.5% against the dollar, reaching a high of 156.3, its best single-day performance in about a month since the joint Japan-U. S. intervention.