The possibility of the Bank of Japan raising rates three times in a year for the first time in 37 years has become a market focus. With the next monetary policy meeting scheduled for 17–18 December, attention is focused on how the Bank will decide during the recovery phase following the turmoil.
The Bank of Japan's decision on a December rate hike has attracted market attention following the turmoil in the equity market. If it decides to raise rates, it would be the third hike since the start of 2026, following hikes in June and September, and would be the first time in 37 years that rates have been raised three times in a year.
However, the outcome cannot be determined at this stage, and some believe it would be premature to reach a conclusion approximately 5 weeks before the policy meeting. The Bank may proceed cautiously, taking market developments and economic indicators into account.
The issues at stake are how the Bank of Japan's rate-hike decision will affect turmoil in the equity market and whether the pace of rate hikes since 2016 will accelerate again. It is expected to remain uncertain ahead of the next batch of indicators, as the market turmoil may or may not move toward abatement.