The Bank of Japan is reportedly planning to raise its policy rate from around 1.0% to around 1.25% at its monetary policy meeting on the 17th-18th. Pressure from the United States and the possibility of a Bessent put are said to be influencing the background to the meeting and the market outlook.
The Bank of Japan is reportedly planning to raise its policy rate from around 1.0% to around 1.25% at its meeting on the 17th-18th, which would be the shortest interval between rate hikes in the series of increases conducted roughly every six months to date. Attention is therefore focused on long-term interest-rate trends and the market response.
Against the conventional view that central-bank rate hikes tend to weigh on stocks, the article points out that this hike is being influenced by political and economic conditions in both Japan and the United States. In particular, the actions of U.S. Treasury Secretary Bessent are seen as being linked to the pressure from abroad.
The article presents the view that a Bessent put could influence monetary policy and that Japanese stocks could rise through gains in U.S. equities. If this effect materializes, it could create a new direction for the stock market.
The fiscal-policy backdrop in Japan is said to include the Takaichi administration's reflationary policies, including preliminary budget requests for fiscal 2027, a cut in the consumption tax on food, and subsidies for energy costs. Markets are watching the sustainability of further interest-rate increases while keeping an eye on developments in this fiscal policy.