The Bank of Japan is considered highly likely to raise its policy rate to approximately 1.25% at its September policy meeting, marking its first rate hike in 3 months. Views that financial conditions will remain accommodative after the hike are widespread, and the pace of future rate hikes is expected to accelerate.
The Bank of Japan is increasingly likely to raise its policy rate to approximately 1.25% at its monetary policy meeting on the 17th and 18th. If implemented, this would be the first rate hike in 3 months since the June meeting.
Since ending its negative interest rate policy in March 2024, the BOJ has generally proceeded with rate hikes approximately every 6 months, but indications suggest it plans to accelerate the pace of rate hikes to prepare for upside risks to inflation. Some market participants also believe the BOJ has indicated that it plans to continue raising rates in pursuit of a sustained underlying inflation rate of approximately 2%.
In terms of market expectations, all respondents reportedly expect a rate hike this month, while a survey found that next January was the most widely expected timing for the following rate hike, at approximately 60%. Comments from sources close to the matter and AI-generated information have also been circulated.