Bank of Japan is unlikely to raise interest rates again soon

JP Morgan Asset Management (info comes via a Bloomberg report, gated) says the Bank of Japan is unlikely to raise interest rates again soon. JPAM say further tightening hinges on the US economy’s performance:

• BOJ may move again only if the Federal Reserve cuts rates and stabilizes the US economy.
• believes any further tightening by the BOJ is likely only in 2025, contingent on a stable global environment.

The background to JPAM’s view here is the extreme market volatility that hit various assets across bonds, stocks, Treasuries, FX and more.

The Bank of Japan have already made it clear that their policy moves are now sensitive to market conditions. The wild swings in JPY and stock were compounded by conflicting hawkish and dovish signals from BOJ officials.

• ForexLive Asia-Pacific FX news wrap: BOJ’s Uchida triggered a sharp yen decline
• ForexLive European FX news wrap: The market rebound continues to stick for now
• ForexLive Asia-Pacific FX news wrap: Wide swings again for the yen

JPAM emphasize that the BOJ is unlikely to make any moves until market conditions stabilize and the global economy avoids recession.

This article was written by Eamonn Sheridan at www.forexlive.com.