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Dithering in December could cost Bank of Japan yen stability

A rate increase in December is all but a certainty for some analysts as they see the cost of a delay by the Bank of Japan being an unacceptably weak yen.

“If the BOJ takes a wait-and-see approach in December, it will likely increase downward pressure on the yen,” Masamichi Adachi, chief economist for Japan at UBS Securities Japan, wrote in a report on Monday.

Unless significant market turmoil occurs ahead of the policy meeting on Dec. 18 and 19, the central bank will likely raise rates at that meeting, Adachi wrote.

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