BOJ Might Hike Interest Rates Sooner Rather than Later

Dow Jones
Yesterday

0610 GMT - Goldman Sachs analysts revise their forecast for the Bank of Japan's policy rate, now expecting the Japanese central bank to hike rates in September, rather than in January 2027, as previously expected. "Thereafter, we expect a rate hike in January 2027, assuming confirmation of strong momentum in the 2027 Shunto wage negotiations, and July 2027, leaving the policy rate at 1.75%," they say. The BOJ is becoming increasingly vigilant against the risk of underlying inflation exceeding 2%, which raises the possibility of earlier rate hikes, the GS analysts say. They add, however, that the BOJ is maintaining its stance that monetary policy hasn't fallen behind the curve at this point, citing underlying inflation below 2% as the reason.

 

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