Now Reading: BlackRock’s Rieder: Yen rebound needs BOJ hawkishness
-
01
BlackRock’s Rieder: Yen rebound needs BOJ hawkishness
BlackRock's chief investment officer Rick Rieder said supporting the yen will require more than government intervention and needs hawkish signals from the Bank of Japan. The yen has edged back toward 160…
The Story in Brief
BlackRock's chief investment officer Rick Rieder said supporting the yen will require more than government intervention and needs hawkish signals from the Bank of Japan. The yen has edged back toward 160 per dollar, near its weakest in four decades, unwinding some gains from recent US-Japan joint efforts. Rieder told Bloomberg Television that intervention is 'not the most durable' path and that monetary policy must convince markets that Japan will raise rates when needed.
Japan's benchmark rate stands at 1% compared with the Fed's 3.5%-3.75% target range. Sources familiar with the matter told livemint.com that Prime Minister Takaichi's government supports a near-term rate hike, likely in September or October. Rieder expects another quarter-point increase in September, though a delay to December is possible. Swap markets indicate traders see a Fed rate cut by year-end.
The Indian Opinion
The narrative that Japan can simply intervene its way to a stronger yen ignores basic arithmetic: as long as the BOJ keeps rates near 1% while the Fed stays above 3.5%, the carry trade will keep the yen weak. Takaichi's government talking up hikes is cheap talk until the BOJ actually delivers. The real test is September: if Japan raises rates again, the debate shifts from 'can intervention work?' to 'will higher rates hurt the economy?' That is the question the markets are watching.
Source: livemint.com
This story was synthesised by AI from the source linked above.
