The Japanese central bank made an important announcement, revealing its intention to strengthen the currency, which has fallen to a 40-year low.
The Bank of Japan’s decision-makers have indicated that it is possible to raise interest rates faster than expected, as the weakening of the yen increases inflationary risks. The July 31 meeting is expected to maintain the current benchmark rate, which was raised to 1 percent in the previous month, the highest level in thirty-one years. However, the tightening cycle may begin sooner than expected, according to Bloomberg.
Japanese Bank policymakers are open to raising the benchmark interest rate more quickly than expected, as the persistent weakening of the yen continues to exacerbate inflationary risks. The central bank is expected to maintain the benchmark rate at its July 31 meeting, after having raised the base rate to 1 percent – the highest level in 31 years – in the previous month. However, the tightening cycle could begin sooner than expected, according to Bloomberg.
