Trump victory heightens risks for BOJ as yen renews slide
160 yen-to-the-dollar seen as Japan authorities' line in sand
Japan issues fresh warning against excessive yen falls
Chance of BOJ hike in December may rise if yen keeps falling
Adds graphic link, bond yield moves in 15th paragraph
By Leika Kihara and Makiko Yamazaki
TOKYO, Nov 7 (Reuters) -A dollar rally triggered by Republican Donald Trump's victory in the U.S. presidential election could heighten pressure on the Bank of Japan to raise interest rates as soon as December to prevent the yen from sliding back toward three-decade lows.
Trump's victory in the U.S. presidential election unleashed sharp dollar gains, as expectations of tax cuts and tariffs on imports drove optimism about economic growth while fueling worries about inflation.
The greenback's strength briefly pushed the yen JPY=EBS to a three-month low of 154.71 on Thursday, well off a high of 140.62 hit in mid-September.
While a weak yen gives exports a boost, it has become a headache for Japanese policymakers by pushing up fuel and food import costs and in turn hurting consumption.
Rising inflation was widely seen as one of the factors behind the massive voter swing against the ruling coalition at last month's general election.
Japan's top currency diplomat Atsushi Mimura escalated his warning against sharp yen falls on Thursday, saying authorities were ready to act against "excessive" currency moves.
One nightmare scenario for policymakers would be a renewed plunge in the yen towards the three-decade trough near 162 to the dollar hit in July - a move that prodded the BOJ to raise interest rates to 0.25% on July 31.
Back then, the tumbling yen led to calls from ruling party lawmakers for the BOJ to hike rates, or send clearer signs of its intention to push up borrowing costs.
Prime Minister Shigeru Ishiba stunned markets on Oct. 2 by saying the economy was not ready for further rate hikes, though he later toned down his message to say he would not intervene in BOJ policy.
"Politicians don't want a weak yen, so even those who have urged the BOJ to be cautious about raising rates could nod to hikes if yen falls accelerate," said Tsuyoshi Ueno, senior economist at NLI Research Institute. "In that sense, the weak yen could prod the BOJ into steady rate hikes."
HAND-IN-HAND
The BOJ exited a decade-long radical stimulus in March and raised short-term interest rates to 0.25% in July on the view Japan was making progress towards sustainably achieving its 2% inflation target.
While many analysts expect the BOJ to hike rates again by March, they are divided on whether it would act in December - or wait until January or March to gauge more data.
The BOJ kept interest rates steady last month but removed language warning of the need to focus on external risks, leaving open the chance of a near-term hike.
Renewed yen falls may heighten the chance of the BOJ acting in December, given the BOJ's sensitivity to the currency's weakness that pushes up import costs, analysts say.
Expectations of a near-term rate hike by the BOJ, coupled with rising U.S. Treasury yields, pushed the benchmark 10-year Japanese government bond (JGB) yield JP10YTN=JBTC above 1% for the first time in more than three months on Thursday.
"The BOJ hasn't said so clearly but its rate hike in July was likely driven in part by its concern over excessive yen falls," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting.
"If the yen heads toward 160 to the dollar again, the chance of a rate hike by year-end will increase," he said.
Tomoyuki Ota, chief economist at Mizuho Research & Technologies, also sees 160-to-the-dollar as authorities' line in the sand that heightens the chance of a BOJ rate hike - and currency intervention by the government to prop up the yen.
In the previous battle with yen falls, the government and the BOJ appeared to work hand-in-hand.
Japanese authorities spent 5.53 trillion yen ($35.8 billion) intervening in the foreign exchange market in July to pull the yen off 38-year lows near 162 to the dollar. That month, the BOJ hiked rates and stressed its resolve to keep pushing up borrowing costs.
BOJ Governor Kazuo Ueda's hawkish hints of near-term rate hikes at last month's policy meeting pushed the dollar down toward 150 yen.
"There's no doubt the market's direction is towards a weaker yen. If yen falls accelerate, the chance of a December rate hike will increase," said Ota of Mizuho Research. "The government and the BOJ will likely act swiftly including through currency intervention."
($1 = 154.4400 yen)
BOJ keeps rates steady https://reut.rs/3YKqnyA
Reporting by Leika Kihara and Makiko Yamazaki, additional reporting by Takaya Yaguchi, Kentaro Sugiyama, Takahiko Wada and Yoshifumi Takemoto; Editing by Sam Holmes, William Maclean
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
