BOJ to raise rates to 1.50% in December, sticking to quarterly pace: Reuters poll

The Bank of Japan (BOJ) plans to increase interest rates to 1.50% in December, according to a majority of economists in a Reuters poll. This decision continues a quicker pace of rate hikes that began with just one increase per year. Inflation pressures are rising due to higher energy and import costs, a weak yen, and the war in the Middle East, prompting more forecasters to anticipate additional rate increases, potentially reaching 2.0% by mid-next year.

The stabilization of the yen, which suffered significant selling pressure throughout the year, is another factor supporting the December rate hike. BOJ board member Junko Koeda expressed that the central bank should not be too cautious about raising rates, given the significant upside risks to inflation. Nearly 70% of economists surveyed, representing 54 out of 78 participants, expect the BOJ to raise its policy rate to 1.5% in the upcoming quarter, with around 80% of them anticipating the increase will occur in December.