亚太股市上涨，日本央行或于9月或10月加息

[music] Bloomberg Audio Studios podcasts radio news. [music] Welcome to the Daybreak Asia podcast. I'm Doug Krishnner. The government of Japanese Prime Minister Sona Ataki Ichi appears to be supportive of a near-term rate hike from the Bank of Japan. We are told the next move is likely to be either in September or October. Now, the Bank of Japan's fears over yen weakness driving up prices further seems to be aligning with the government's desire to strengthen the impact of the recent US Japan currency intervention.

Earlier, Bloomberg spoke with Black Rockck's Rick Reer.

Is the Bank of Japan going to be hawkish to support the currency? And here to four, they've been a bit deliberate in terms of moving it. This moving in September to sort of stabilize the currency is a big deal. intervention. You know, I've watched intervention happen over time. You need to really keep going with a lot of firepower. I would argue it's not the not the most durable way to get there. That's Rick Reer. He is global fixed income CIO at Black Rockck.

For a closer look at the yen and the overall price action in the foreign exchange, I'm joined by Bloomberg FX and rate strategist David Finery. David joins from our studios in Singapore. Thank you for being here. give me your sense of what we're seeing play out right now in terms of the yen and and whether it's really incumbent at this point on the BOJ to move more aggressively otherwise we're going to be stuck here at around 15950 or 160 against the greenback.

Yeah. So you've had the classic case of the intervention dollar yen goes down and basically bounds quickly and be honest it seems to be bound quicker and quicker every time after the intervention I think now. So you said you're back up to around 15950 around that area. Uh the market at the moment is definitely a bit split on where it goes from here. Obviously the market's very aware of potential further intervention particularly if it went above 160.

So not there's not much enthusiasm to sort of buy at these levels. Having said that, there's people going why would I sell at these levels either if the really the fundamental picture hasn't changed. Yes, the BOJ it looks like would maybe be hiking in September or certainly October but the market's going you but even before Bloomberg put up a story yesterday the market's going well I sort of was thinking that anyway so the market pricing changed a little bit but the markets were quite it was quite heavily factored into markets already hence you did see a bit of bit of a bump so the point being is even if BOJ hikes I think let's say we hike now they hike another quarter say in January whatever the market's going I've already factored that in so for you to move something else really has to happen.

So I think BOJ policy is a factor but it's not the only factor and I think it comes more back to the dollar side of the equation. I think I think what's interesting is even last night you had well this week you've had you know lower than expected CPI or tamed CPI PPI came lower than expected and yet dollar so the market dial back expectations for Federal Reserve cuts still looking for basically a hike this year. sorry for people have hikes not cuts still looking for a hike basically this year but it's not fully priced in now um and yet can't go anywhere it you know it doesn't there very little sell off so I think at the moment you are in this lull period should we say where people going you know do I want to buy it no do I want to sell it no and therefore it's not really going anywhere it's really be data driven a grind anywhere at best but you'd have to think at the moment given that it can't it's struggling to go lower.

Therefore, you go what doesn't sort of go down will go up by default at some point. So, I'd say the risks are still skewed to the upside. But again, I just cuz no one's jumping on this bandwagon, I can't blame them to be fair. Then I think at the moment it's, you know, a grind high at best.

What is your sense of the role that the US is playing in this intervention? And I'm wondering whether or not you can give any credence to this idea that the bigger worry for the US Treasury is that uh Japan would essentially sell US treasuries as a way of raising dollars to fund uh defense of the Japanese currency.

I think look that's always been bantered around. Um the reality is I think you know at the end of the day holds quite a lot of of treasury. So we have to put that in mind. know even if it sold some of them it could still be relatively a small dip in the pie given how the liquidity in the treasury market and then I think also Japan itself has be aware of you has a very good relationship with with the US so you go you know is that something you want to do obviously not saying you won't do it or can't do it but I think at the end day is that really the last measure and historically they really haven't done it so why start it now I think what's interesting is you've had the US come in and support the coordinated intervention so you know that hasn't happened in a long long time and I think that's interesting and I do think the interesting thing though and again we don't know maybe only Scott Bessant knows this but was it like because Scott person has said I he'd like BJ to hike a bit faster historically so was it question be for me becomes is okay was person like we'll come in and help you this time but you got to hike quicker as a more as a result of course the catch is even with an intervention and even now with BJ seem to be hiking at a faster pace we say once every six months um dollar again still 15950.

So you know at the end of the day we can talk about left and center but the market has spoken. It goes we're still 15950. So if something different has to change for that dynamic therefore to change.

What about the shape of the yield curve in Japan right now? Do you expect that to change much going forward?

I think that there's certainly can be pressure on the longterm part of the yield curve. Obviously worth to see a bit more information on Takage spending plans and we we look takenomics. We know that you know that basically involves spending and you know that's okay she's going to look it will pay for growth down the line and we'll see about that. The market's obviously more worried about okay well how much more spending is going to is it going to net spending will entail because obviously you know if they're lowering the if they lower the consumption tax and you go okay it's less revenues therefore you need to fund more.

So I think that the the pressure remains on the long end of the curve because of what uh the prime minister is looking to do. You know I think as we move forward you know these plans always evolve you know the budget plans keep tweaking and always sort of a supplemental budget. you know, if the expansionary plans, if the funding plans build, then I think it will just remain. But I I think from a long-term perspective, you know, the pressure is going to remain on the on the long end of a curve, the short-term end of a curve to some degree, but again, the markets have already priced in the hike.

So, I don't see the BOJ going really really aggressive now. Um, you know, they may do once I said once in September, October and once in January, but the market goes, yeah, but we factored that in already. So if there's a little bit more slope to the curve in Japan, that's going to be a positive for Japanese financials for the banks as well, right?

It'll be a positive for them. Um and so you know the nick guys obviously like most stock indexes has been performing well. So certainly from a backtock perspective, they'll go they'll certainly quite quite happy take that. Um but yeah in terms of overall in dollar yen you know I I just think at the end of the day unless yields shoot high which again I don't think you know bank of Japan's always very wary about whenever long-term yields g