Yen depreciation becomes a catalyst for rate hikes, with the Bank of Japan's hawkish stance exceeding expectations

Deep Tide TechFlow News, February 2nd, according to Jinshi Data reports, the summary of the Bank of Japan’s January policy meeting shows that as authorities closely monitor the impact of yen weakness on inflation, internal recognition of the need for timely rate hikes is increasing. Based on the two-day policy meeting summary that concluded on January 23rd, one of the nine committee members stated: “Given that addressing rising prices is Japan’s urgent task, the central bank should not spend too much time examining the impact of raising the policy interest rate, but should take the next step at the right time, which is to raise interest rates.” The summary signals that the committee led by Ueda and others may raise the benchmark interest rate faster than the market generally expects (currently, the market expects rate hikes approximately every six months since the December rate increase last year). The yen exchange rate seems to be a key factor, as the terms “yen depreciation” and “foreign exchange” appeared twice as often as in the previous meeting.