BOJ Seen Raising Rates Every 3 Months, With 80% Odds of a December Hike
Updated
Updated · The Japan Times · Oct 21
BOJ Seen Raising Rates Every 3 Months, With 80% Odds of a December Hike
3 articles · Updated · The Japan Times · Oct 21
Summary
Eiji Maeda, a former BOJ policy chief, said the central bank will likely keep lifting rates roughly every quarter, with the next move in December and another in March or April.
80% odds in overnight swaps already point to a December increase, while the BOJ is still expected to leave rates unchanged at its Oct. 30 meeting.
Inflation is driving that path: Friday’s data is expected to show headline CPI at 2.1% in September and a core measure excluding fresh food and energy at 2.3%.
The September hike took the policy rate to 1.25%, inside the BOJ’s estimated 1.1%-2.5% neutral range for the first time, after its fastest tightening pace since 1990.
Maeda said rates may eventually need to reach 2.25%—about four more hikes—as Japan emerges from deflation, though back-to-back moves remain unlikely unless the yen weakens sharply.