BlockBeats news: On January 20, Akira Hoshino, head of Citigroup's Japan business, stated that if the Japanese yen continues to weaken, the Bank of Japan (BOJ) may raise interest rates three times this year, doubling the current rate level. Hoshino said in an interview that if the USD/JPY exchange rate breaks through 160, the BOJ might increase the uncollateralized overnight call rate by 25 basis points to 1% in April.
He believes that if the yen remains weak, a second rate hike of a similar magnitude could occur in July, and even a third hike could be possible before the end of the year. "Simply put, the yen's weakness is driven by negative real interest rates," said Hoshino. "If the Bank of Japan wants to reverse the exchange rate trend, it has no choice but to address this issue." Currently, Hoshino expects the yen to fluctuate this year within a range slightly below 150 to 165 against the U.S. dollar. (Gold 10)