Recently, Japan's economic data has exceeded expectations, fueling speculation that the Bank of Japan may continue to raise interest rates by the end of the year. Bank of Japan Governor Kazuo Ueda stated that further rate hikes would be taken if the economy and prices meet the forecasts. Experts believe that the market has regained stability despite previous volatility, suggesting that the Bank of Japan might raise interest rates by the end of the year or early next year.
Meanwhile, Morgan Stanley strategist Michael Wilson warned that a potential rate cut by the Federal Reserve could trigger the unwinding of yen carry trades, causing global market turbulence. Yen traders might withdraw from U.S. assets due to rising domestic interest rates in Japan, posing market risks. BK Asset Management foreign exchange strategist Kathy Lien also noted that the unwinding of yen carry trades in September could lead to a large-scale sell-off, reminiscent of the market volatility experienced in early August.
