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Analysis: Trump's inauguration may stimulate the Bank of Japan to raise interest rates ahead of schedule

Analysis: Trump's inauguration may stimulate the Bank of Japan to raise interest rates ahead of schedule

Bitget2024/11/07 06:45

The former executive director of the Bank of Japan, responsible for monetary policy, stated that Trump's victory in the US presidential election has intensified uncertainty for the Bank of Japan. If the trend of a weakening yen continues to expand, it could become a potential catalyst for an imminent interest rate hike.

Kazuo Momma, a former senior official at the Bank of Japan, said in an interview on Thursday: "The U.S. election has led to increased uncertainty not only for the Bank of Japan but also for everyone globally. The only reason why the Bank of Japan might raise interest rates ahead of schedule could be due to a rapid depreciation in yen."

Momma believes that if the exchange rate between yen and dollar falls to 160, it may be seen as a key threshold by policymakers. However, any timing changes regarding currency fluctuations will also depend on public dissatisfaction levels.

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