BoJ to Press On with Higher Rates Amid Strong Economic Data

The Bank of Japan (BoJ) is set to make its next policy decision, and market expectations are that it will continue on its path towards higher interest rates.

Last month, the BoJ raised the policy rate to 1.00%, a move that reflected its tightening bias and expectation that further monetary accommodation would be required.

Since then, economic data has been strong, with retail sales figures showing significant growth and the Tankan business survey indicating a return of business optimism to levels not seen since 2018.

This uptick in business confidence is likely to provide comfort to the BoJ's view that a virtuous cycle between company profits and wages will continue.