Kiuchi: Political Turmoil in Japan Poses Risk for BOJ's December Rate Hike

Forex - A former member of the Bank of Japan's (BOJ) board, Takahide Kiuchi, stated that the political turmoil following the ruling coalition's loss of majority in last weekend's early elections could lead the BOJ to postpone its next interest rate hike to January.

Kiuchi, who served on the BOJ board from 2012 to 2017, mentioned, "If the yen depreciates further against the US dollar, the likelihood of the BOJ raising interest rates in December will increase, but otherwise, I believe January of next year is a possibility."

He added that if the dollar-yen exchange rate rises above 155 and the government is forced to intervene in the forex market again, the BOJ might feel pressure to raise rates to prevent further depreciation of the yen.

Currently serving as a senior economist at Nomura Research Institute, Kiuchi stated, "The BOJ's fundamental policy stance has not changed," and he expects the bank to reach a terminal policy rate of around 0.75% by mid-2025.