DBS Sees BoJ Hiking Rates by 25bps in September

DBS Group Research analysts Taimur Baig and Chang Wei Liang expect the Bank of Japan (BoJ) to hike rates by 25 bps at its September 17-18 meeting.

Citing solid GDP growth, stronger wages, and inflation near the 2% target, they see a hawkish tone but rule out a 50 bps move or back-to-back hikes as the base case.

The analysts emphasize that the BoJ should remain mindful of market impact from large policy surprises, referencing the unexpected rate hike in July 2024 which triggered a massive JPY carry-trade unwinding and jitters across global financial markets.