Expectations are growing that the Bank of Japan will raise its policy rate at its Monetary Policy Meeting on the 17th and 18th, and the market is closely watching the pace of rate hikes and the eventual level rates will reach. Depending on developments, the impact on households could also grow.
Expectations are growing that the Bank of Japan will raise its policy rate at its Monetary Policy Meeting on the 17th and 18th. Financial markets have largely priced in a rate hike, and the pace at which rates will rise is now the main focus.
The 2-year, 1-year forward rate in the overnight index swap market is used as a financial-market indicator of the expected terminal rate, or eventual interest rate level. On the 2nd of this month, the interest rate for the one-year period beginning in September 2028 rose to 2.5%.
Against this backdrop, remarks by BOJ Policy Board member Takata Hajime (高田創) have also drawn attention, with some experts suggesting that rates could move above 2.5%. Market developments could change depending on trends in prices and changes in financial conditions.
This article is based on a summary of a paid article, and the release of additional information is awaited.