BOJ gov’s comments next week unlikely to reverse yen weakness

0135 GMT — Bank of Japan Gov. Kazuo Ueda is expected to reiterate his stance of seeking further interest-rate hikes at his press conference next week, but that is unlikely to reverse the yen’s weak momentum, says Mizuho Securities economist Yusuke Matsuo. “Markets have already largely priced in BOJ rate hikes at a pace of once every six months, making it difficult to drive the yen significantly higher through such communication alone,” he says. “Given market expectations for clear guidance on the timing and pace of the next rate hike, any stance interpreted as dovish risks fueling further yen weakness in an environment where the dollar remains broadly strong.” The BOJ is widely expected to keep the policy rate at 1% next week as it gauges the impact of its previous hike. ([email protected])

Yen Consolidates; Hopes for Faster Pace of BOJ Rate Hikes May Support

0021 GMT — The yen consolidates against other G-10 and Asian currencies, but may be supported by a media report that the BOJ is open to a faster pace of rate hikes, analysts say. “The report cited JPY weakness as an upside inflation risk,” CBA’s Joseph Capurso says in a research note. “Markets now place an 84% chance of a BOJ hike in October, up from 72% before the report,” says the head of Foreign Exchange, International & Geoeconomics. The BOJ’s post-meeting conference could be an important driver of yen strength next week if Gov. Ueda “flags the risk of an increase in the policy interest rate soon,” Capurso adds. The dollar is little changed at 163.10 yen and the euro is flat at 186.12 yen, LSEG data show. ([email protected])