The BOJ is expected to raise rates by 0.25% at its September meeting, with the next hike after September expected to be delayed until December or January next year. The terminal rate is seen reaching 1.75%, while the frequency of rate hikes may change depending on future inflation trends.
The BOJ is expected to raise its policy rate by 0.25% at its Monetary Policy Meeting on 17–18 September, bringing it to 1.25%. The pace and number of future rate hikes will depend on the extent to which upside risks to inflation increase and on incoming data.
The next rate hike after September is widely expected to come in December this year or January next year, with the terminal rate seen likely to reach 1.75%. The frequency and timing of additional rate hikes may vary depending on the wording of Governor Ueda (植田) in his speech and the Outlook for Economic Activity and Prices.
The neutral interest rate is estimated to be between 1.1% and 2.5%. Once the policy rate reaches 1.5%, the BOJ is expected to shift to a stance of making careful decisions based on the data, rather than setting the pace of future rate hikes in advance.
The 2027 MPM schedule is also mentioned. Multiple rate hikes above 1.75% may be envisaged, and depending on conditions, a meeting around July could also become an option.