BOJ Seen Raising Rates to 1.25% Amid Inflation and US Pressure

The Bank of Japan (BOJ) is expected to raise its policy rate to 1.25% on Friday, according to a survey by CNBC.

About 89% of the 18 economists and analysts surveyed expect the BOJ to raise its benchmark rate by 25 basis points at the conclusion of its two-day meeting.

This move would signal that the BOJ is becoming more comfortable accelerating the tightening cycle, which has been roughly six months intervals between increases since it began normalizing monetary policy in March 2024.

The case for another increase has strengthened as inflation and wages have moved higher. Japan's headline inflation rate reached 1.9% in July, its highest level this year, due to energy costs rising amid the Iran war.