Momma: Trump's Victory Could Catalyze BOJ's Interest Rate Hike

Forex - Former BOJ executive Kazuo Momma stated that as a result of the U.S. elections, "Uncertainties have increased not only for the BOJ but for everyone in the world. The almost sole reason for the BOJ to raise interest rates early would likely be the rapid weakening of the yen." According to Momma, a rate of 160 yen per dollar could be a significant threshold for policymakers; however, the timing of any interest rate movement will also depend on the degree of public discontent due to households' concerns about rising import costs and hotter inflation expectations. Considering that the central bank is anticipated to raise its benchmark interest rate from the current 0.25% to around 1% by the end of the fiscal year in March 2026, Momma mentioned that an interest rate hike in January seems a reasonable bet for now. He noted that the tightening cycle has progressed with about one move every six months, saying, "Still, uncertainties are extremely high, so I'm not sure how meaningful it is to talk about a base scenario at this moment. There is a reasonable chance it could be delayed."