Nomura Warns of Aggressive Rate Hikes if Yen Falls Below 160

Nomura Securities has warned that if the yen continues to weaken and approaches the 160 level, the Bank of Japan may raise interest rates consecutively at its next three meetings in September, October, and December.

This would mark the most aggressive monetary policy tightening pace for the central bank in decades, according to Yujiro Goto, Head of Japan FX Strategy at Nomura Securities.

Goto stated that a 25-basis-point rate hike in September 'appears reasonable,' and consecutive hikes in October and December are 'possible' if the yen's weakness continues toward the 160 level.

The persistent weakening of the yen has driven the market to reassess the Bank of Japan's interest rate hike trajectory, with some investors expecting a more aggressive tightening pace than previously anticipated.