Yen Strengthens as BOJ Is Said Likely to Raise Rates This Month

Japan’s currency rose against the dollar after Bloomberg News that Bank of Japan officials are ready to raise interest rates this month, provided there’s no major shock to the economy or financial markets in the meantime.

The yen gained as much as 0.2% to 154.80 against the dollar. The report said that the central bank will also indicate it will continue to raise rates if its economic outlook is realized while remaining cautious on how far they will eventually push rates up, according to people familiar with the matter.

Key members of Prime Minister Sanae Takaichi’s government wouldn’t try to stop the BOJ if it decides to raise interest rates in December, while some senior officials oppose the timing, Bloomberg also reported on Thursday. Overnight index swaps show about a 90% chance of a move this month, compared with less than 60% a week ago.

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The reports come after Governor Kazuo Ueda on Monday sent the clearest yet about the possibility of a rate increase at the BOJ’s December policy decision meeting. A move by the central bank could help support the yen, which has been the worst performer among its Group-of-10 peers this quarter.