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30/07/24
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BOJ Considers Hiking Short-Term Rates to About 0.25%
On Tuesday, Jiji news agency reported the Bank of Japan was considering hiking short-term interest rates to about 0.25% from the current 0-0.1% at its policy meeting that will end on Wednesday.
NHK, Japan’s public broadcaster also said that the BOJ was evaluating hiking interest rates, with many board members believing that inflation is accelerating as per their forecasts.
NHK cited an anonymous source and noted that the board members believed the BOJ should be vigilant regarding risks that the weak yen may push inflation higher.
Such a move would come after the central bank’s March decision to end 8 years of bond yield control and negative interest rates, and underlines its resolve to move towards phasing out its huge monetary stimulus steadily.
According to Kazuo Ueda, the BOJ Governor, the central bank will hike rates again if it is convinced that increasing wages will keep inflation sustainable at about its 2% target, and bolster services prices.
While many market participants believe the BOJ will hike short-term rates this year, they differ on the exact timing. More than 75% of economists polled by Reuters between July 10 and 18 said they expected the BOJ to not change rates this month.
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