Japan's Business Mood Sends Mixed Signals to BOJ on Rate Hike

The Bank of Japan's (BOJ) next move on interest rates may be put off due to mixed signals from Japanese businesses, according to a central bank survey. The 'tankan' survey, released on Thursday, showed that manufacturers' confidence hit an eight-year high over July-September, while non-manufacturers' mood soured.

The BOJ raised its policy interest rate to 1.25% last month to counter price pressure from an energy shock and weak yen. However, the survey's mixed results may soften the chance of a back-to-back rate hike this month.

Corporate inflation expectations remained elevated but did not accelerate from three months earlier. The forecast for three years ahead is 2.6%, signalling expectations of inflation beyond the BOJ's 2% target for a prolonged period.