Furusawa: BoJ Aiming for Terminal Rate Around 1.5-1.75%

Former Japanese top FX diplomat Tadahide Furusawa has weighed in on the Bank of Japan's (BoJ) interest rate policy. According to Furusawa, the BoJ is likely aiming for a terminal rate of around 1.50%-1.75%. This means that while the BoJ may not raise rates immediately, it could eventually do so at this level.

Furusawa also suggested that Japan and the US could intervene again in the foreign exchange market if the yen returns to levels hit before their joint action. Past episodes have shown that verbal references to joint action tend to resurface whenever the yen approaches these levels, and coordinated intervention has historically carried more weight than unilateral rounds.

The BoJ's interest rate policy is a key area of focus for markets, particularly given the current global economic environment. While Furusawa's comments are not necessarily authoritative, they do provide some insight into the thinking behind the BoJ's policy decisions.