Stepped-up global easing risks making it harder for BOJ to hike

Bets on more aggressive monetary easing in a number of advanced economies risk making the Bank of Japan stand out all the more for contemplating raising, not lowering interest rates.

Bank of England Gov. Andrew Bailey said his central bank can become “a bit more activist” in its approach to lowering rates, in remarks published Thursday. The euro is heading for its longest daily losing streak since April as traders speculate on an increasingly aggressive rate-cut path at the European Central Bank. Weak economic data in Canada and Sweden have also raised odds on further easing in those markets.

“The step-up to faster easing” outside of Japan means “the BOJ has to be careful,” Krishna Guha and Marco Casiraghi, central bank analysts at Evercore ISI, wrote in a note Thursday. “It will be harder to move rates up as others cut faster.”