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Yen Weakens as BOJ Summary Damps Hopes for Back-to-Back Rate Hike
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CNBC TV18•01-10-2026, 08:46
Yen Weakens as BOJ Summary Damps Hopes for Back-to-Back Rate Hike
- •The Japanese yen weakened against the dollar after the Bank of Japan's September meeting summary disappointed investors expecting signs of another rate hike this month.
- •Japan's currency dropped as much as 0.5% to 158.21 against the dollar, becoming the worst performer among Group-of-10 peers.
- •Swaps market pricing for an October 30 rate hike slipped to just under 20% from over 30% the previous day, with a full hike priced in by December.
- •The BOJ affirmed its policy focus on preventing inflation from overshooting its target, with members noting the desirability of raising the benchmark rate earlier.
- •The BOJ's quarterly Tankan business survey showed increased manufacturer confidence but little sign of intensifying inflation pressure, further lowering the probability of an October rate hike.
Key Questions Answered
The Japanese Yen weakened because the summary of opinions from the Bank of Japan's September meeting disappointed investors who were looking for stronger signals regarding back-to-back rate hikes.
Swaps market pricing for an interest rate hike by October 30 slipped to just under 20% following the release of the September meeting summary.
The quarterly Tankan business survey showed that confidence among Japan's large manufacturers rose to its highest level in more than eight years while indicating little sign of intensifying inflation pressure.
