The BOJ is widely expected to leave rates unchanged at this month's meeting, while the possibility of an additional rate hike in December remains. Based on the fact that the policy rate was raised to 1.25% on 18 September, the author forecasts no hike in October, followed by a hike to 1.5% in December.
Ahead of the monetary policy meeting, expectations that the BOJ will leave rates unchanged have been driving market speculation, while views concerning an additional rate hike in December have gained ground. Bloomberg reported that the BOJ is widely expected to leave rates unchanged at this month's meeting, but will not rule out an additional hike in December. The article points out that the underlying trend in price increases still carries a risk of exceeding 2%.
The BOJ raised the policy rate to 1.25% on 18 September, making developments at the October meeting and in December the focus going forward. The expert forecasts no rate hike in October, followed by a decision to raise rates at the December meeting, taking the policy rate to 1.5%.
The author believes that, against a backdrop of diminishing expectations for a rate hike by the FRB and strong downward pressure on the yen, the BOJ may ease off its shift toward monetary tightening. At the same time, the author expects 3–4 rate hikes in 2027, with the policy rate rising above 2%. The author also says that if the FRB chooses to keep rates unchanged in 2027 and then begins cutting them, the timing of continued BOJ rate hikes could be delayed.