Following the BOJ’s 25bp rate hike at its September monetary policy meeting, Nomura Securities expects rate hikes every 3 months going forward, with the rate-hike cycle ending in 2027.
The Bank of Japan decided on a 25bp rate hike at its September 2026 meeting. Nomura Securities expects rate hikes every 3 months going forward and forecasts that the rate-hike cycle will end in 2027.
Nomura Securities’ base case assumes rate hikes at 3-month intervals in December this year and March next year, marking a shift from a slower pace of rate hikes to a standard pace. This could make the BOJ’s policy operations less unusual compared with those of other countries.
Overt government interference in BOJ policy operations is expected to end, but the impact of BOJ personnel appointments is expected to remain. Remarks by Cabinet Office officials and developments in appointments to the BOJ Policy Board have been identified as market focal points.
An expansionary fiscal policy and BOJ independence could steepen the yield curve, but the author expects a bear-flattening trend. The impact is expected to vary depending on inflation trends from next year onward.