Bank of Japan raises rates, and might do so again soon
The move was widely expected given the underlying indicators, the yen and pressure from the United States.
On Friday, the Bank of Japan raised its rates, a move that was anticipated by many and may be followed by further hikes. The central bank lifted the uncollateralized overnight call rate to 1.25% from 1%, marking its highest level since 1995. This decision was almost certain, with all 52 economists surveyed by Bloomberg between September 4 and September 10 expecting the BOJ to act.
However, the future path of interest rate hikes remains uncertain as the BOJ faces pressure from the United States to curb the yen's decline and closely monitors the domestic economy and inflation. Governor Kazuo Ueda is set to address the media later on Friday. Investors anticipate signals of a more aggressive stance. The BOJ has been gradually increasing rates for over two years, bringing them positive in March 2024.
This latest rate hike coincides with the U.S. Federal Reserve's recent 25 basis point increase in the federal funds rate to a range of 3.75% to 4% on Wednesday.
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- Bank of Japan hikes key interest rate to 1.25% freemalaysiatoday.com
