According to Jinshi, the rebound of the 3-month TONA (Japanese yen overnight average rate) contract expiring in December this month has provided aggressive traders with a window to reset short positions before the Bank of Japan meeting. At the current level, the market expects the Bank of Japan to raise interest rates by only 25 basis points again this year, which seems low against the backdrop of continued weakness in the yen. Although the Bank of Japan plans to continue to gradually normalize monetary policy, Bank of Japan Governor Kazuo Ueda has listed the yen as one of the factors considered in their decision-making. This suggests that the upper limit of the Bank of Japan's target interest rate will be close to 50 basis points (rate increase) by the end of the year, as predicted by economics. In addition, the December TONA contract is only 5 basis points lower than the close on March 19, when the Bank of Japan raised interest rates for the first time in this cycle.
