A new risk for the yen is emerging, with currency strategists in Tokyo warning that there’s a chance the Bank of Japan may stand pat on interest rates until March or later.
A small taste of the dangers ahead came Wednesday, when the yen slumped to its weakest in level in more than two weeks as traders reacted to a Bloomberg report that BOJ officials saw little cost to waiting before raising rates.
That jolt only took the currency to ¥152.82 versus the dollar, and came against the backdrop of debate over whether the central bank would make its move on Dec. 19 or at the following meeting about a month later. A subsequent report by Reuters on Thursday, indicating that policy makers aren’t inclined to rush, saw the yen erase its small intraday gain.