Former BOJ Member Suggests Possible Rate Hike Amid Yen Depreciation Concerns

Former Bank of Japan (BOJ) member Makoto Sakurai has indicated that the BOJ might consider a rate hike as early as March if the yen continues to depreciate ahead of the anticipated Japan-U.S. summit in March. According to Jin10, Sakurai emphasized that currency intervention offers only temporary relief against yen selling pressure. He argued that the most effective response to yen weakness is a BOJ rate increase. Sakurai noted that further depreciation of the yen could elevate import costs, thereby increasing inflation and offsetting some of the downward pressure from government fuel subsidies. He also mentioned that if the yen experiences significant depreciation, the BOJ could justify a rate hike in March by citing expected strong wage growth during the annual spring wage negotiations between companies and unions.