HSBC Asia FX research head Joey Chew said renewed yen weakness could prompt a
hawkish Bank of Japan hike at the September meeting to shore up the currency.
Markets price roughly 80bp of BOJ tightening over the next 12 months to about a
1.8% policy rate; HSBC's economics team now expects two further hikes—in
September and Q1 2027—taking the policy rate to 1.5% (up from a prior view of a
single December hike). Chew said a sustained yen recovery depends on more
attractive real rates, easing fiscal concerns and Japanese residents shifting
assets from overseas into domestic markets.
