Forex – Tomoka Amaya, former director of Japan’s financial watchdog, the Financial Services Agency, said the BOJ is in a position to raise interest rates again by the end of the year as the recent market turmoil has not had a permanent effect.
“Even though the market has experienced a certain amount of turbulence in the last month or two, I don’t think there has been a loss of confidence in the markets. What is important is not the level of stock prices or the level of turbulence, but the level of belief,” Amaya said.
Amaya said there has been enough stability to keep interest rate hikes on the table this year and that higher rates would benefit banks. If the BOJ were to take that step, banks in Japan would benefit by increasing their profit margins. Still, the pace of rate hikes would be a bigger concern than the level itself, Amaya said. “A lot of banks are adjusting themselves and their portfolios to meet the challenge of rate hikes. I think there is still some room for rate hikes. And they can benefit from that part of the higher interest rate.”
