BOJ is preparing markets for another rate hike says Peter Boockvar
- Adam German
- 45 minutes ago
- 1 min read
Speaking on CNBC's Squawk Box on September 3, Peter Boockvar, Chief Investment Officer at OnePoint BFG Wealth Partners, discussed the strengthening Japanese yen, the outlook for Bank of Japan policy and the broader inflation environment.
Boockvar said he believes the BOJ is preparing markets for another interest-rate increase on September 18, while also keeping the possibility of currency intervention in view.
Key Points
Boockvar sees ¥160 to the US dollar as an important threshold and argues that the BOJ will need not only to raise rates, but also signal that further tightening could follow.
Rising Japanese interest rates are increasingly having implications beyond Japan. Boockvar argues that higher Japanese bond yields have helped pull European and US yields upward over the past several years.
A more hawkish BOJ could eventually help calm Japan's longer-term bond yields if investors become convinced that the central bank is serious about controlling inflation.
Yen strength is another important factor to watch. Boockvar questions whether a sustained move higher in the yen could become part of a broader weakening of the US dollar.
Higher Japanese interest rates and a stronger yen could also trigger further unwinding of the yen carry trade, although Boockvar says it is difficult to know how large the remaining positions are.
Boockvar expects commodity prices to remain under upward pressure, including energy and agricultural products, creating a more difficult inflation environment for central banks.
