A majority of economists anticipate that the Bank of Japan (BoJ) will raise interest rates in December, according to a Reuters poll. This would mark the third rate hike since June. The decision comes amid rising energy prices, with oil surpassing $100 per barrel this year due to geopolitical tensions like the US-Iran conflict and the Russia-Ukraine war. Japan, as a net energy importer, faces pressure to address inflation and a weaker yen.
BoJ member Junko Koeda emphasized that the central bank should not be overly cautious about raising rates, citing significant upside risks to inflation. The survey of 78 analysts revealed that 54 expect a rate hike in December, while the BoJ is expected to hold rates unchanged in October. Many BoJ officials prefer to assess more data on how previous increases have affected financial conditions before making a move.
Looking ahead to 2027, 60% of analysts, or 39 out of 65, predict that the BoJ will raise rates to 1.75% by the end of June. This reflects ongoing concerns about inflation and the need for monetary policy adjustments to stabilize the economy.