Japanese Yen: BOJ back-to-back hike risk – Rabobank

Rabobank’s RaboResearch Global Economics & Markets team flags potential historic tightening by the Bank of Japan (BOJ). Former BOJ director Momma sees another 25 basis point hike as a real possibility, which would be the first back-to-back move in decades. The report notes the initial hike left the Japanese Yen hanging and questions whether a second increase could pressure the Yen carry trade.

BOJ tightening could test carry trade

"The BOJ waits until the end of October, but its ex-executive director Momma today claims another 25bps hike --the first back-to-back hike since late-Cold War 1989-90and the first monthly back-to-back since peak-Cold war March 1980 (when rates hit 9.0%)-- as a “real possibility”, albeit at just 20-30%."

"Again, it’s history possibly being made around us in markets."

"The first 25bps hike left JPY hanging: would a second hang the Yen Carry Trade out to dry?"