Citi(US:C) 智通财经网·2026-01-20 02:07Core Viewpoint - Citigroup's Japan market head Akira Hoshino warns that if the yen remains weak, the Bank of Japan may raise interest rates three times by 2026, potentially doubling the current policy rate [1] Group 1: Monetary Policy Outlook - Hoshino suggests that if the USD/JPY exchange rate exceeds 160, the Bank of Japan may increase the uncollateralized overnight call rate by 25 basis points to 1% in April [1] - He anticipates a similar rate hike in July and possibly a third increase by the end of the year if the yen continues to weaken [1] - The current negative real interest rates are driving the yen's weakness, and addressing this issue is crucial for reversing the exchange rate trend [1] Group 2: Economic and Market Conditions - Hoshino expects the yen to fluctuate between 150 and 165 against the dollar this year, with the current rate at 158.2, having reached an 18-month low of 159.45 [2] - If key rates like the 10-year government bond yield exceed inflation rates, Japanese institutions may consider reallocating overseas investments back to domestic fixed-income assets [2] - The lack of sufficient investment options in Japan is a key reason for the persistent weakness of the yen [2] Group 3: Strategic Initiatives - Hoshino aims to enhance collaboration between the trading team and investment banking to capitalize on the opportunities created by the M&A boom in Japan [2] - He plans to involve team members in early client discussions to provide optimal financing solutions during transactions [2] - The goal is to optimize supply-demand matching from the initial stages of transactions to offer the most effective financing solutions to clients [2]