BOJ Signals Rate Hikes Ahead Amid Price Pressures

The Bank of Japan (BOJ) is expected to keep interest rates steady at 1% on Friday, but signal its resolve to continue pushing up borrowing costs in response to mounting price pressures from a weak yen and Middle East conflict.

The BOJ raised rates to a 31-year high in June and has been focusing on taming price pressures from the energy shock. Most analysts polled by Reuters expect the BOJ to raise rates again to 1.25% by year-end, which would follow the expected hawkish signals from other central banks.

Core consumer inflation hit 1.6% in June, staying below the BOJ's 2% target for a fifth straight month. However, analysts expect core inflation to climb back above 2% later this year as the recent surge in producer prices filters through to the broader economy.