BoJ is unlikely to provide long-term support for the Yen – Commerzbank

FXStreet Insights Team FXStreet

There are increasing signals that the Bank of Japan (BoJ) might soon normalise monetary policy – including interest rate policy. Economists at Commerzbank analyze how a "normalisation" of monetary policy could impact the Japanese Yen (JPY).

Not every rate hike heralds a new era

Our forecast takes into account the possibility that the first steps towards monetary policy normalisation will soon be taken. The Yen could benefit from this. However, we expect this to be of limited duration.

As in 2000 and 2006, the first interest rate hikes would probably stifle inflation. And then there will be no further normalisation.

Source: Commerzbank Research

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