BOJ Deputy Governor Seeks More Rate Hikes Amid Weaker Yen Concerns

The Bank of Japan's deputy governor, Ryozo Himino, is calling for more rate hikes to combat inflation and mitigate the risks of a weaker yen. In a recent speech, Himino emphasized that the central bank should pay closer attention to upside price risks than in the past, citing factors such as higher crude oil prices, rising semiconductor prices driven by AI demand, and the yen's fall.

Himino noted that raising rates in a timely manner will help avoid inflation acceleration and abrupt rate hikes in the future. He also stressed that this would serve the best interests of small- and medium-sized firms and mortgage borrowers.

The market is widely expecting a rate hike at the next policy meeting on September 17-18, after BOJ governor Kazuo Ueda referred to 'speeding up the pace of rate hikes' if necessary. A joint yen-buying intervention by Japan and the US authorities in July led to expectations for a September hike, as it may help curb the Japanese currency's depreciation.