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coinpedia 2025-01-28 09:53:21

BOJ Eyes Gradual Rate Hikes: Aiming for 1.5% by 2025

The post BOJ Eyes Gradual Rate Hikes: Aiming for 1.5% by 2025 appeared first on Coinpedia Fintech News The Bank of Japan (BOJ) is expected to continue its cautious yet steady path of raising interest rates, with the next hike anticipated by July, according to a recent survey of economists. Former BOJ policymaker Sakurai believes the central bank may ultimately target a 1.5% rate, reflecting Japan’s robust economic growth and steady inflation prospects. BOJ Eyes 1.5% Rate Hikes The Bank of Japan recently raised short-term interest rates to 0.5%, marking the highest level in 17 years. This move shows the central bank’s confidence in Japan’s growing economy, rising wages, and steady inflation, which support its plan to normalize monetary policy. However, a recent survey conducted by the poll of 45 experts found that 56% expect the next rate hike, likely to 0.75%, in July. September was the second choice, with 18% predicting it, while 9% believe it could happen as early as June. Some economists even speculate that the BOJ might raise rates to 1.5% within the next two years. Mixed Reactions on BOJ’s Hike Governor Kazuo Ueda, who has led three rate hikes since taking office, is expected to proceed cautiously to avoid market disruptions. Analysts believe that Japan’s strong economy, stable price growth, and broader wage increases give the central bank room to gradually raise rates. However, opinions on the BOJ’s communication strategy remain divided. While 23% of analysts appreciated its transparency before the January meeting, 32% felt its messaging could have been clearer. What Next? The BOJ’s next policy meetings in March and April will provide further insights into its plans. With inflation and growth remaining on track, a rate hike to 0.75% by mid-year seems likely, setting the stage for an eventual rise to 1.5%. For now, the BOJ is taking a cautious but firm approach to unwinding its long-standing easy monetary policies.

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