Barclays: Fed Decision Makes BOJ Rate Hike "Almost Inevitable"

Jin10 News, September 17 – According to the Financial Times, the Japanese yen and other Asian currencies weakened on Thursday following the U.S. Federal Reserve's first rate hike in three years, increasing pressure on the Bank of Japan (BOJ) as it prepares to decide on the extent of its monetary policy tightening. Since the Fed's decision, the yen has depreciated by more than 1.1%, while the U.S. dollar has appreciated by 0.7% against a basket of major trading partner currencies. Mitul Kotecha, Head of Asia FX and Emerging Markets Macro Strategy at Barclays, stated that these movements put Asian currencies at a disadvantage. He remarked that the Fed's decision makes a BOJ rate hike "almost inevitable." Abbas Keshvani, Asia Macro Strategist at RBC Capital Markets, noted that the region is facing a double blow: on one hand, Asia is a net energy importer; on the other hand, the Fed's rate hike cycle increases the appeal of the U.S. dollar, creating additional pressure that many Asian central banks find difficult to counter.