Bank of Japan Expected to Hike Rates by 25bps Next Week

Sources indicate that the Bank of Japan is likely to raise interest rates by 25 basis points next week, bringing the policy rate to 1.25%, a 31-year high. This move, coming just three months after the June hike, signals an accelerated tightening pace amid moderate economic recovery and rising price pressures. While the central bank maintains that financial conditions will remain accommodative even at this level, Governor Kazuo Ueda is expected to provide insights into the future tightening path.