The Bank of Japan is discussing raising its policy rate from the current 1.0% to 1.25% at its monetary policy meeting beginning on the 17th. This could be the first rate hike in 3 months, and may constitute an unusual acceleration.
The Bank of Japan is discussing raising its policy rate from the current 1.0% to 1.25% at its monetary policy meeting beginning on the 17th. If implemented, it would be the first rate hike in 3 months and could be the shortest interval between rate hikes since 1990.
Upside risks to inflation have increased, with higher crude oil prices, yen depreciation and expanding demand related to AI raising concerns as factors that could push up prices. Some believe that higher crude oil prices could feed through to domestic prices via higher energy costs.
Many market participants view the rate hike as highly likely, while attention is also being paid to the possibility that a widening interest-rate differential between Japan and the United States could intensify inflationary pressure through import prices.
If the rate hike is implemented, some believe the pace of rate hikes, which had previously been about once every 6 months, will accelerate. Attention will focus on the statement issued after the meeting and the governor's press conference for indications of future policy.