As the Bank of Japan begins its monetary policy meeting on the 17th, expectations are strengthening that it will raise rates again after a short interval, making an unusual rate hike not seen since 1990 increasingly likely. Persistent inflation risks and concerns over yen depreciation are behind the move.
The Bank of Japan will begin its monetary policy meeting on the 17th. Market expectations are growing that it will raise rates again just 3 months after its previous hike, putting future price trends and the direction of monetary policy in focus.
The hike is being viewed as an “unprecedented decision” not seen since 1990, with persistent inflation risks cited as a contributing factor. Higher oil prices following developments in the Middle East and AI-related demand are seen as factors driving global inflation.
Market attention is also turning to the yen’s depreciation and the possibility of another rate hike. Some analysts believe the yen weakened by about ¥1 as the prospect of an additional rate hike before year-end increased following the US rate hike decision.
Experts have said that the BOJ should continue raising rates in a timely and appropriate manner, drawing renewed attention to the future direction of monetary policy.