The Bank of Japan (BOJ) is expected to keep up its rapid pace of interest rate hikes, with December emerging as the next likely move. According to sources familiar with the matter, current price trends and the bank's assessment of limited economic impact from past increases are driving this decision.
BOJ officials believe underlying inflation has reached a level in line with their 2% target. However, they view the current policy rate as still some distance away from a neutral rate, which neither stimulates nor restrains the economy.
The bank's stance reflects a balance between addressing inflation and avoiding overly restrictive monetary policy. The December rate hike is seen as the next step in this carefully calibrated approach.