Rising consumer spending and inflation could increase expectations of a Q4 2024 Bank of Japan rate hike. A more hawkish BoJ rate path may lead to a USD/JPY drop toward 147.5.

BoJ and Interest Rates

Japan’s new prime minister, Shigeru Ishiba, recently poured cold water on expectations of a Q4 2024 BoJ rate hike, saying the country was not ready for further rate hikes. However, the BoJ’s latest regional quarterly report suggested a Q4 2024 rate hike remains possible.

The report showed improvement across all nine regions, although some reported weakness in part. Hokuriku and Tokai reported improving economic recoveries, while Kanto and Kinki, among Japan’s main regional contributors to GDP, reported moderate economic recoveries. A sustained recovery would likely boost expectations of a Q4 2024 BoJ rate hike.

Amidst shifting sentiment toward the BoJ rate path, investors should monitor BoJ Board Member speeches. Their insights could influence demand for the Yen and sentiment toward the BoJ rate path. While the Japanese government may comment on monetary policy, the BoJ remains independent.

Overview of the US Economic Calendar: FOMC Minutes and Fed Speakers in Focus

In the US session, the Fed will be under the spotlight. The FOMC Meeting Minutes from September will draw interest. The minutes will offer insights into the economic outlook and interest rate path, though the recent US Jobs Report could limit the impact on the USD/JPY.

Investors should also monitor FOMC member speeches. FOMC members Thomas Barkin, Austan Goolsbee, Philip Jefferson, and Fed Vice Chair John Williams are on the calendar to speak. Their reactions to the US Jobs Report and views on the timeline for a Fed rate cut could impact US dollar demand. Calls to delay rate cuts may push the USD/JPY toward 150.