Yen and other Asian currencies weakened after the Fed’s first rate hike in three
years, increasing pressure on the BOJ; the yen has fallen more than 1.1% since
the decision while the dollar rose 0.7% against a basket of major trading
partners. Mitul Kotecha, head of Asia FX and EM macro strategy at Barclays, said
the moves leave Asian currencies disadvantaged and make a BOJ rate hike "almost
inevitable." RBC Capital Markets Asia macro strategist Abbas Keshvani said the
region faces a double hit—being largely energy importers and seeing renewed
dollar attraction from Fed tightening—meaning many Asian central banks will
struggle to compete.
