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Growing indications suggest that the Bank of Japan (BoJ) may be considering the normalization of monetary policy, potentially including adjustments to interest rates. Analysts from Commerzbank delve into the potential effects of a monetary policy normalization on the Japanese Yen (JPY).
Not every rate hike heralds a new era
In our projections, we consider the likelihood of initiating initial measures toward normalizing monetary policy in the near future. The Yen might experience positive outcomes from such actions, yet we anticipate this to be a temporary phenomenon.
Similar to the scenarios in 2000 and 2006, the initial interest rate hikes are likely to suppress inflation. Consequently, we foresee a lack of sustained normalization beyond this point.
