Japanese Former Senior Foreign Exchange Official: Yen Intervention Could Happen Again at Any Time, Bank of Japan May Hike Rates in September

BlockBeats News, August 14th, Former senior Japanese foreign exchange official and former Deputy Managing Director of the International Monetary Fund (IMF) Mitsuhiro Furusawa stated that, at the current exchange rate, the yen is significantly undervalued, which is hurting the Japanese economy by raising import costs. He mentioned that if the yen were to return to the level before last month's coordinated intervention, Japan and the United States could intervene in the forex market again at any time, with no specific level like 160 or 162 yen being a target. Furusawa expressed that intervention can only buy time, and the more fundamental solution is for the Bank of Japan to accelerate the pace of interest rate hikes.

He predicted that the Bank of Japan will raise interest rates in September, followed by another hike in December or January next year. He estimated that the Bank of Japan ultimately aims to raise the interest rate to around 1.5% to 1.75%. This assessment is based on his estimate of the neutral rate, which is 1.1% to 2.5%; if the economy continues its growth momentum, there could be further rate hikes starting from the fiscal year beginning in April 2027. (FXStreet)