Reuters reported, “BOJ may raise rates at December meeting. The BOJ is almost certain to raise interest rates at its December policy meeting. The market’s probability of a December rate hike has risen to 93%.

Despite the growing likelihood of a rate hike, Japanese equities are firm. This is because of the positive response to the Takaichi administration’s stimulus measures and the inflow of global money seeking to diversify away from the U.S.
Although government bond rates have risen sharply and there are concerns about expansionary fiscal policy, interest rates are still quite low by global standards, and investors are probably not yet greatly concerned about that.

The next FOMC result announcement in the US is on December 10. The market is looking at a near 90% probability of a 0.25% rate cut.
Still, why did Chairman Powell say after the last FOMC meeting that a December rate cut was not a certainty and was quite far away?

The probability of a rate cut increased because NY Fed President Williams said there was room for a rate cut in the near term against the backdrop of a softening labor market; the probability of a rate cut, which was around 35%, has since increased to 70% and is currently at 90%.
And Kevin Hassett is likely to be the next Fed chairman. President Trump says he has already narrowed it down to one person and will make the announcement early next year.

Kevin Hassett is a super dove. He has said he would cut rates if it were him. Whatever Chairman Powell says, his term ends next April, after which Hassett will probably take over. An ultra-dovish Fed is born.
The market will begin to factor in an aggressive rate cut by Hassett. If this happens, stock prices will firm and the dollar will fall. We should be wary of the possibility of a Hassett market.

Last week, there were daily reports about the BOJ raising interest rates. Chief Cabinet Secretary Kihara’s statement that “we will respond appropriately to excessive volatility and disorderly movements in the foreign exchange market” drove the yen higher to ¥154.35.
During the past week, Governor Ueda’s speech drove the yen higher, but not so much by the end of the day.

With interest rate hikes already factored in, the yen’s strength at the 155-yen level means that even if the FOMC meets next week and cuts the U.S. interest rate, there may be limited room for the yen to fall from here.
It may be time to change to a push-buy stance.