BOJ Poised for Further Rate Hikes as Yen Rises to Near 153

The Japanese yen has risen to near 153 against the US dollar, and bond yields are nearing multi-decade highs. The Bank of Japan's (BOJ) monetary policy meeting on September 17-18 is a critical juncture for the policy trajectory.

BOJ Policy Board member Kazuo Ueda stated that further interest rate hikes are necessary to complete monetary policy normalization, warning that accelerating inflation could create a risk of 'having to implement rapid rate hikes.'

The yield on 10-year Japanese government bonds (JGBs) recently peaked above 3% before retreating to approximately 2.91%. Ueda emphasized the importance of addressing negative real interest rates, which he believes should be lifted out of negative territory as soon as possible.