BoJ Hawkish: Interest rates should be raised to at least 1% by 2025, and the yen has surged past 152 to reach a two-month high

Japan's Central Bank deliberator Naoki Tamura publicly said Thursday that Central Bank should raise the policy Intrerest rate to 1% or more in the second half of fiscal 2025, meaning there is at least 0.5% room for rate hikes from the present. The yen once hit a 2-month high at 151.83 today. (Synopsis: Japanese spring fighting is coming!) Trade unions shout "6~7% salary increase" inflation may accelerate, ninety percent of experts expect interest rate hikes this week) (Background supplement: Japan's Central Bank meeting minutes: 2025 may gradually raise interest rates to 1% If inflation meets expectations, the yen will break 157) The Wall Street Journal reported that Naoki Tamura, a deliberator at Japan's Central Bank, said on Thursday that the BOJ should raise the key policy Intrerest rate to 1% in the second half of fiscal year 2025 or higher. The short-term Intrerest Rate should be increased to at least around 1% in the second half of fiscal 2025, which is necessary to remove upside risks to prices and achieve price stability targets sustainably and steadily. Japan's core inflation rate hit a 16-month high of 3% in December, raising pressure on the BOJ to raise interest rates, and Japan's Central Bank also decided in late January to raise the Intrerest rate by 1 yard (0.25%) to 0.5%, the highest level since 2008, as market expectations suggested. Japan's second half of fiscal year 2025 starts in October this year, and if Central Bank decides to raise the Intrerest rate to 1% in the second half of fiscal year, it means that there is at least 2 yards (0.5%) room to raise interest rates from now. Naoki Tamura, seen as a hawkish representative of Japan's nine central government deliberation members, was the only member to propose a rate hike last December. In his speech today, Naoki Tamura reiterated his view that the neutral Intrerest rate is at least 1%, and said that even if Central Bank raises the Intrerest rate to 0.75%, the actual Intrerest rate excluding inflation is still clearly negative, indicating that further rate hikes are needed. The yen rose above 152, hitting a new 2-month high Source: Google Finance The yen, which is regarded as a key factor in the decision-making of Japan's Central Bank Intrerest Rate, has strengthened significantly this week, and the exchange rate of USD/JPY soared to 151.83 today, reaching its highest level since December 12 and is now tentatively at 152.32. Previously, the yen fell to a six-month low in early January, approaching the key threshold of 160. FXSTREET analysis believes that the strength of the yen is mainly supported by the market's hawkish expectations for Japan's Central Bank to continue to raise interest rates, and it may further appreciate in the future. Wednesday's better-than-expected Japanese wage data also reinforced this expectation, and expectations that the Spring Fight talks, which concluded in March, are expected to bring a large wage increase for the second consecutive year, which will support Japan's Central Bank to continue to raise interest rates. Kazuo Ueda, president of Japan's Central Bank, also stressed last month that he would continue to raise interest rates if the prospect of rising wages could support consumption, helping Central Bank achieve its 2% inflation target in a lasting manner. In addition, the market's expectation that the US Federal Reserve will cut interest rates further this year and Japan's Central Bank will continue to raise interest rates, resulting in a narrowing interest rate differential between Japan and the United States, is another factor in supporting the yen. Bank of Japan January Meeting: Favor to continue to raise interest rates, the yen is a key consideration The minutes of Japan's Central Bank January meeting released this week showed that many members of the Bank of Japan warned of the risk of rising inflation and overheating of financial activity due to the continued depreciation of the yen, and advocated that Central Bank must raise interest rates "in a timely and gradual" manner. But at the same time, given the high degree of uncertainty about the overall economic outlook, Central Bank must be "extremely cautious" in signaling the pace or magnitude of future rate hikes. At the same time, the minutes of the January meeting also showed that Japan's Central Bank has significantly increased its emphasis on the depreciation of the yen, mentioning the "yen" as high as 7 times in the January minutes, more than 3 times in December, which reinforces the view that the yen is a key factor in Japan's Central Bank's decision to raise interest rates. The yen ArbitrageClose Position tide reappears? It is worth noting that if Japan's Central Bank raises interest rates again this year, the market fears that the Japanese yen ArbitrageClose Position tide that caused the collapse of global stock markets and encryption currency markets on August 5 last year will return. However, Marcin Kazmierczak, chief operating officer of RedStone Oracles, recently analyzed that the impact may be gradual rather than immediate, and the key is to see how Central Bank's decision-makers will balance domestic inflation targets with global market stability. In addition, the market has enough time to digest the news, and it is difficult to judge how the market will go. After Japan's Central Bank raised interest rates at the end of July last year, in response to the yen Intrerest Rate and the United States and Europe and other countries interest rate differentials will begin to narrow, the market triggered a wave of yen Arbitrage trading Close Position, resulting in global financial market turmoil, on August 5 last year, BTC once price drops to $48,900, the S&P 500 index fell 3%, the largest one-day decline since September 2022, Nikkei 225 The index is even bigger dump than 12%. Related reports Japan's Central Bank has a 99% chance of raising interest rates next week, will the yen ArbitrageClose Position tide hit BTC again? Japan's Central Bank Intrerest Rate freezes up" officials focus on the future "how high to raise interest rates" yen Arbitrage trading Close position crisis when will it burst? Japan's Central Bank meeting minutes: 2025 may gradually raise interest rates to 1% If inflation meets expectations, the yen depreciates above 157 "Japanese Central Bank is extremely hawkish: the Intrerest rate should be raised to at least 1% in 2025, and the yen rose above 152 to a two-month high" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Block Chain News Media".