Prospect of Faster BOJ Rate Rises Provide Limited Support to Yen
Dow Jones08-14
0829 GMT - Mounting speculation that the Bank of Japan could raise interest rates at a faster pace is failing to offer much support to the yen, ING's Chris Turner says in a note. Subdued foreign-exchange volatility continue to favor yen-funded carry trades where investors borrow in low yielding currencies to invest in higher yielding currencies, he says. "That said, the risks to funding in yen are squarely increasing, and if we are right with our call for unchanged Federal Reserve rates in September, the dollar could well be trading back below 158 yen." The dollar falls 0.2% to 159.18 yen. Money markets price a 67% chance that the BOJ will raise rates by 25 basis points in September, LSEG data show.
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