The market is increasingly expecting the Bank of Japan’s pace of rate hikes to accelerate, while Governor Ueda Kazuo (植田和男) has suggested that conditions are changing. Although the market is gradually pricing in a December rate hike, some continue to point out that the outlook from the New Year onward remains uncertain.
The market is increasingly expecting the Bank of Japan to accelerate the pace of rate hikes, and the possibility of an additional rate hike within the year is being discussed. The article focuses on a period in which the operating approach to monetary policy is changing and conveys the market’s interest in the future direction of interest rates.
Governor Ueda Kazuo (植田和男) is reported to have made remarks suggesting that conditions are changing, indicating that a review of the pace of rate hikes is under consideration. Against the backdrop of the Governor’s remarks, the market has become increasingly alert to the possibility of a policy change.
Market participants regard a December rate hike as already priced in, but continue to assess uncertainty over developments from the New Year onward as still high. Attention is also being paid to the influence of surrounding factors, including the views of the financial authorities and movements in the yen exchange rate.