Bloomberg Surveillance · Thursday, September 3, 2026
Jati Bhattacharya of TD Securities suggests that Bank of Japan (BOJ) rate hikes are becoming increasingly necessary to address the weakening yen. He believes that officials have been cornered into this move and that markets may anticipate a more aggressive hiking path than the current cadence of once every six months. Bhattacharya notes that substantial yen shorts have been built over the last year and a half, necessitating a systematic unwind.
“The risk of BOJ hikes are rising as that is the only sustainable way to stem currency weakness.”
“I think they have to hike in September. I think even Besant has cornered them into that move. But I think people are potentially expecting them to signal a more aggressive path for hiking interest rates.”
“And that requires a systematic unwind of the yen shorts, which have been built substantially over the last year and a half.”