Expectations are growing that the Bank of Japan will almost certainly raise its policy rate by 0.25% at its next meeting, to be held on 17–18 September, putting the course of monetary policy after the September rate hike and the pace of future hikes in focus.
Expectations are growing that the Bank of Japan will almost certainly decide to raise its policy rate by 0.25% at its next monetary policy meeting, to be held on 17–18 September. This would put the interval since the previous rate hike in June at approximately 3 months, prompting speculation that the pace of rate hikes could accelerate.
The Bank of Japan is proceeding with rate hikes in line with the likelihood of achieving its central economic and price outlook. The situation in the Middle East, AI demand and the foreign exchange market are expected to affect the timing and pace of monetary policy adjustments.
Expectations are growing that another rate hike will be implemented in December or next year after the September hike, with the possibility that rate hikes could continue through January 2027. The terminal rate is expected to be 1.75%–2.0%, with some forecasts that it will be reached between the second half of 2027 and 2028.
Some have pointed to remarks by Treasury Secretary Bessent as influencing this view, while others expect the Takaichi administration’s checks on the Bank of Japan to ease, giving the Bank greater freedom to raise rates.