The Bank of Japan is highly likely to raise its policy rate from around 1.0% to around 1.25% at its midday monetary policy meeting. The European Central Bank and the Federal Reserve are also expected to decide on rate hikes, potentially marking the first simultaneous rate hikes by Japan, the United States and Europe in 20 years.
The Bank of Japan is reportedly highly likely to announce just after midday that it will raise its policy rate from the current level of around 1.0% to around 1.25% at its monetary policy meeting. A rate hike has emerged as an option to address the risk of underlying inflation exceeding 2%.
The move is expected to be the first rate hike in three months since June, and could mark the shortest interval between rate hikes since the shift away from monetary easing. Factors that continue to push up prices include higher oil prices amid tensions in the Middle East, rising demand related to AI and the weaker yen.
The Bank of Japan's rate decision is being made against a backdrop of a resilient economy, an upward trend in corporate transaction prices and growth in outstanding lending, all reflecting accommodative financial conditions. The aim is said to be curbing sustained price increases.
The European Central Bank is expected to decide on a rate hike on the 10th and the Federal Reserve on the 16th, potentially marking the first simultaneous rate hikes by Japan, the United States and Europe since 2006.
Today's developments and the key points to watch going forward are expected to extend across a range of areas, including the impact on households and reactions in the foreign exchange and equity markets.