Analyst: Shigeru Ishiba's departure may delay the Bank of Japan's interest rate hike, and the yen's weakness may widen

ChainCatcher news, according to Jinshi Data, Pepperstone's Chris Weston pointed out that the resignation of Japanese Prime Minister Shigeru Ishiba shifts the focus to his successor and what this might mean for political stability. The market will weigh the extent of additional fiscal measures and budgets under the new leadership. "The degree of fiscal stimulus is crucial for controlling the rise of long-term Japanese government bonds."

He stated that these developments could be seen as another reason to delay the Bank of Japan's next 25 basis point rate hike until 2026. This expectation has already been reflected in the market, with swap traders anticipating only a 12 basis point hike by December. Weston noted that this is another reason why few are willing to hold the yen at present. He expects the yen's weakness in the Asian market to become widespread.