Regarding the BOJ's future pace of rate hikes, former board member Maeda Eiji (前田栄治) indicated that the policy rate could be raised to around 1.75% by next spring. He also said the policy rate is expected to be set at around 1.5% at the December meeting.
At its September Monetary Policy Meeting, the BOJ raised its policy rate to around 1.25%, bringing the interest rate to its highest level in about 30 years. Maeda (前田氏) indicated that he expects the BOJ to continue raising rates at a pace of roughly once every 3 months, and said the rate could be raised to around 1.75% by next spring.
The interest rate swap market is pricing in an approximately 80% probability of a rate hike in December, broadly in line with Maeda's (前田氏) view. Some market participants assume 1.75% as a guide for the neutral rate, placing it near the midpoint of the BOJ's estimated range of 1.1%–2.5%.
There have also been indications that the wording describing policy as accommodative could change in the future, along with the view that after the next rate hike it may become more difficult to assess price trends and financial conditions.
While some, particularly small and medium-sized companies, are concerned about long-term effects such as higher borrowing costs, there were indications that rate hikes from December onward could influence the course of the domestic economy.