Expectations are that Japan will intervene in the currency market if the yen falls to 165

A Reuters poll shows that the Bank of Japan is expected to raise the key interest rate to 0.50% by the end of March, with 59 out of 61 economists in agreement.

• nearly two-thirds of 32 economists believe the BOJ will hike interest rates on January 24
• with the remainder expecting a hike later
• Two-thirds of 21 economists in a Reuters poll predict Japanese authorities will intervene in the currency market if the yen falls to 165 per dollar
• poll shows this year’s labor talks are expected to result in a 4.75% rate of pay increase, slightly up from 4.70% in the December poll.

From the Reuters report on their poll, in brief:’

BOJ Governor Kazuo Ueda and Deputy Governor Ryozo Himino said earlier this week the central bank will debate whether to raise rates at its next meeting.

Strong domestic wage momentum and new price pressures support the case for a January hike, said Ayako Fujita, chief Japan economist at JPMorgan Securities.

• “If the inauguration of incoming U.S. President Trump does not cause major market turmoil, delaying the interest rate hike until March is seen as excessively increasing market volatility risk,” Fujita said.

Earlier:

• ICYMI: Nomura are now forecasting a Bank of Japan (BoJ) interest rate hike next week
• A majority of Japanese companies see wage hikes as a priority investment area this year
• Japan December PPI +0.3% m/m (expected +0.4%) 3.8% y/y (expected 3.8%)
• USD/JPY back under 156.00
• Bloomberg says Bank of Japan likely to hike rates next week
• Recapping Japan’s wholesale inflation data earlier – helping to fuel rate hike chatter

• BoJ Gov Ueda says will raise policy rate if economic, price conditions continue to improve

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