Nomura say around 150 is now the ceiling for USD/JPY. Forecast a BOJ rate hike in December

Nomura on the Bank of Japan:

• see the December monetary policy meeting as the most likely date for the next interest rate increase
• BOJ will hike then even if inflation “trends sideways without rising”, Nomura cite the Bank’s July “Summary of opinions”, saying it signalled a shift among policymakers; that the Board still view monetary conditions as accommodative
• Nomura cite BOJ eagerness to move further away from its prior super-easy monetary policy

On the comments last week from BoJ Deputy governor Uchida (you’ll recall Uchida said rate hikes were not on a
pre-determined path and would depend on economic and inflation data)

• his comments don’t rule out the possibility
  that the BOJ could raise interest rates if stability returns to
  financial markets

On the yen, Nomura say:

• USD/JPY is likely to find a ceiling around 150
• the carry trade is no longer attractive due to the increase in volatility

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