The Bank of Japan is considering a rate hike at its 17-18 September monetary policy meeting, against a backdrop of inflation trends showing potential upside. The market is becoming increasingly wary of the first rate hike since the end of negative interest rates.
The Bank of Japan is considering the possibility of deciding on a rate hike at its September monetary policy meeting and is focused on the risk of upside surprises in inflation ahead of the meeting. It has been reported that some Policy Board members have so far shown an inclination to advance discussions on a rate hike. The actions of the parties involved are being closely watched as a decision approaches.
At the 30-31 July monetary policy meeting, some Policy Board members were said to have referred to the possibility of a policy change, highlighting that the BOJ remains in a situation where it is considering its first rate hike since ending negative interest rates. This is making the timing of a shift in policy operations, which would mark a turning point, increasingly realistic.
Against a backdrop of upside surprises in inflation, discussions are focusing on a direction that would increase flexibility in interest-rate policy. The market is watching the BOJ’s future response and interest-rate trends, and there have also been reports that operational changes, including consecutive fixed-rate purchase operations, are under consideration.