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BOJ Hikes Rates to 31-Year High Amid U.S. Pressure
business22 days ago

BOJ Hikes Rates to 31-Year High Amid U.S. Pressure

The Bank of Japan raised its policy rate from 1% to 1.25%, the highest in 31 years, as underlying inflation nears the 2% target, in a move that occurred amid unusual public pressure from a U.S. official and ongoing Tokyo political dynamics. The decision follows hikes by the Fed and ECB amid rising energy costs, with the yen weakening and yields climbing; two of the BoJ’s nine board members, appointed by PM Takaichi, dissented, underscoring continued debates over pace and independence. Analysts expect further tightening in the months ahead.

via The New York Times|
#bank-of-japan#business#inflation
BOJ hikes rates to 1.25% as inflation risk prompts normalization
economy22 days ago

BOJ hikes rates to 1.25% as inflation risk prompts normalization

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest since 1995, signaling a quicker rate hike cycle amid inflation risks that could push inflation back toward the 2% target. The decision, by a 7-2 vote with two dissents, followed expectations that inflation will stabilize near 2%, while the yen weakened and 10-year JGB yields fell slightly; August headline inflation was 1.9% with core at 1.7%. The move continues Japan’s monetary normalization begun in March 2024 and comes amid external calls to tighten policy.

via CNBC|
#bank-of-japan#economy#inflation
Analysts Forecast BOJ Rate Hike to 1.25% Amid Inflation and Yen Pressure
business24 days ago

Analysts Forecast BOJ Rate Hike to 1.25% Amid Inflation and Yen Pressure

A CNBC survey of 18 economists shows a strong majority expect the Bank of Japan to raise rates by 25 basis points to 1.25% at its two‑day meeting, signaling a faster tightening cycle as inflation accelerates (July inflation 1.9% with wage gains). About 89% anticipate a hike, and the yen is expected to trade around 155–160 per dollar over the next month, with ongoing U.S. pressure and past yen interventions shaping the policy backdrop and possible board dissent.

via CNBC|
#bank-of-japan#business#inflation
Yen Rally Pushes Traders to Eye CNH and CAD for Carry Trades
markets26 days ago

Yen Rally Pushes Traders to Eye CNH and CAD for Carry Trades

The yen’s strength has traders seeking new carry-trade funding sources, with offshore yuan and the Canadian dollar emerging as contenders; the yen has risen about 6% against the dollar since July, and while hawkish BOJ signals and potential rate hikes support the move, analysts expect rotation rather than an end to yen carry trades, as CNH and CAD offer competing carry dynamics and funding options.

via CNBC|
#bank-of-japan#canadian-dollar#carry-trade
Bessent bets on intervention as Treasury expands longer-dated bond buybacks to $6B
finance1 month ago

Bessent bets on intervention as Treasury expands longer-dated bond buybacks to $6B

The Motley Fool report says U.S. Treasury Secretary Scott Bessent signaled aggressive intervention in markets by authorizing up to $6 billion in longer‑dated Treasuries repurchases, part of efforts to curb yields and stabilize the yen after a period of coordination with Japan; with the 10‑year yield around 4.85% and the 30‑year just over 5.3%, analysts are weighing whether larger future buys are on the table and what this implies about Treasury options amid notable debt and inflation dynamics.

via Currently.com|
#bond-yields#finance#longer-dated-bonds
Bessent Signals Bigger Bond Buybacks Amid Market Pressure
business1 month ago

Bessent Signals Bigger Bond Buybacks Amid Market Pressure

The U.S. Treasury will announce the size of a long-dated debt buyback—expected to be at least $4 billion, with analysts predicting $5–6 billion or more—focusing on 10- and 20-year notes. Secretary Scott Bessent has warned markets by saying he is the house now, signaling an aggressive tool to cap yields and stabilize markets, including a related yen intervention. The actual buyback will run Thursday after the announcement, and analysts warn a larger program could raise questions about Treasuries’ credibility while markets await demand data from holders.

via CNBC|
#bond-buyback#business#debt
Bessent: I am the house now — don’t bet against the yen
markets1 month ago

Bessent: I am the house now — don’t bet against the yen

US Treasury Secretary Scott Bessent warned currency traders not to bet against the yen, saying he has “pretty good insight” into BOJ actions after a rare US–Japan intervention and declaring that “I am the house now.” His comments come as the yen rebounded toward ¥153 per dollar and as Washington expands long‑term bond buybacks to at least $4 billion, underscoring increased policy coordination and continued volatility in currency markets.

via Financial Times|
#bank-of-japan#foreign-exchange#markets
business1 month ago

Japan’s Yen Defense Delivers Big Profits Even as FX Reserves Fall to Record Lows

Japan’s Ministry of Finance disclosed that foreign currency reserves fell by a record $95 billion in August as it sold US Treasuries to support the yen, part of four months of interventions that slashed reserves by about $174 billion. Profits from these interventions flow into the Foreign Exchange Fund Special Account (FEFSA); about 30% is kept as a buffer while 70% is moved to the General Account, financing a government slush fund and policy measures such as a food tax cut. The piece emphasizes that these interventions have been hugely profitable, even as the yen remains weak and reserves shrink.

via Wolf Street|
#business#fefsa#foreign-reserves
Japan's FX reserves plunge to record low after aggressive yen defense
business1 month ago

Japan's FX reserves plunge to record low after aggressive yen defense

Japan's foreign reserves fell 6.18% in August to $1.207 trillion—the fastest drop on record—driven by interventions to prop up the yen and a fall in government-bond values, bringing total yen intervention to 27.1 trillion for the year and marking the largest yearly amount ever spent on currency support, aided by a rare coordinated move with the United States.

via CNBC|
#business#currency-market#foreign-reserves
Payrolls Preview Sparks Broad Market Rally as Fed Hints at Pause
business1 month ago

Payrolls Preview Sparks Broad Market Rally as Fed Hints at Pause

U.S. stocks rallied Thursday (Dow ~+1.2%, S&P 500 ~+1%, Nasdaq ~+1.4%), while futures were broadly flat ahead of Friday’s August payrolls report (consensus +53,000 jobs, unemployment 4.1%). A softerTreasuries backdrop followed Fed Governor Waller’s hint of a rate pause at 3.5%–3.75% in September, with inflation metrics next week as key catalysts. The yen strengthened toward multi‑month highs amid intervention talk and BOJ rate‑hike bets, Asia markets opened higher, and after‑hours movers included Lululemon (-18%) and DocuSign beating on earnings; the week remains on track for gains.

via CNBC|
#business#fed#futures
Debt Time Bomb: Japan’s 250% GDP Burden Sparks Global Yield Jitters
world1 month ago

Debt Time Bomb: Japan’s 250% GDP Burden Sparks Global Yield Jitters

Japan’s debt load tops 250% of GDP and its long-term yields rise toward 3%, underscoring a fiscal crunch that global markets are watching as U.S. yields push above 5% amid inflation and lax fiscal policy. Interventions on both sides of the Pacific—yen stabilization and yield capping—signal concern, but a broader risk remains: rising borrowing costs, questions about central-bank independence, and the potential for a destabilizing unwind of carry trades that could reshape the global financial landscape.

via asiatimes.com|
#bond-yields#global-markets#japan-debt-to-gdp