BUZZ-COMMENT-BoJ must stand and deliver hike or yen will be robbed
Jan 17 (Reuters) - Having talked the talk about an interest rate increase next week, the Bank of Japan needs to walk the walk or risk a steep yen sell-off.
The growing expectation of a BoJ rate hike on Jan. 24 inflated the yen this week, with Japan's currency notching a new four-week high against the dollar on Friday, when 154.98 marked the EBS low for USD/JPY.
Japan's central bank is likely to raise rates next week barring any market shocks when U.S. President-elect Donald Trump takes office, according to five sources familiar with its thinking. Trump's second term begins on Monday.
If the BoJ does not raise rates next week, USD/JPY could jump towards 159 - a level it threatened when scaling a six-month peak as the dollar appreciated following strong U.S. jobs data on Jan. 10.
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(Robert Howard is a Reuters market analyst. The views expressed are his own. Editing by Alison Williams)
((robert.howard@thomsonreuters.com))
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