Japanese Yen: September BoJ risk builds – Commerzbank
Volkmar Baur at Commerzbank argues that July inflation and strong Purchasing Managers' Index (PMI) data in Japan suggest price dynamics would not block a Bank of Japan (BoJ) rate hike.
Commerzbank's Volkmar Baur believes that July's inflation data and robust Purchasing Managers' Index (PMI) figures in Japan do not prevent the Bank of Japan (BoJ) from raising interest rates in September. While he anticipates a rate hike in the fourth quarter, Baur acknowledges that the latest data does not rule out an earlier move by the BoJ.
The inflation rate increased to 1.9%, with core rates also showing stabilization at the desired 2%. Additionally, the purchasing managers' indices for manufacturing and services sectors demonstrated positive economic trends, with manufacturing PMI at 55.1 and services PMI at 52.3. Despite these encouraging signs, the BoJ is expected to continue raising rates only in the fourth quarter.
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