{
  "id": 6252867,
  "title": "Why the BOJ will bet small on rate hikes now to avoid a bigger shock later",
  "url": "https://urgent.news/2026/09/08/why-the-boj-will-bet-small-on-rate-hikes-now-to-avoid-a-bigger-shock",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-08T07:19:01.000Z",
  "source": {
    "name": "The Business Times - Companies & Markets",
    "slug": "the-business-times-companies-markets",
    "url": "https://www.businesstimes.com.sg/companies-markets/banking-finance/why-boj-will-bet-small-rate-hikes-now-avoid-bigger-shock-later"
  },
  "original_language": "en",
  "account": "The Bank of Japan (BOJ) is set to increase its main policy rate by 25 basis points to 1.25% in September, according to consensus forecasts. While the central bank has been raising interest rates to curb inflation concerns, it must now convince markets that it is not lagging behind in addressing the issue. The last time the BOJ raised its main policy rate by half a percentage point was in 1989, when Japan experienced an asset bubble that eventually led to a prolonged period of economic stagnation. Currently, inflation pressures are nowhere near the levels seen in the 1980s. The BOJ is cautious about delivering a larger-than-usual 50 basis point hike this month, given the subdued near-term price pressures and the public's accustomedness to near-zero borrowing costs. The central bank would prefer to stick to the customary 25 basis point increase, allowing time to assess the impact of higher rates on corporate and household activity. Stakeholders are concerned that a bigger hike could backfire, sending a message of desperation and raising inflation fears. BOJ officials believe that the risk of overshooting is higher than the potential upside. Recent data shows inflation hasn't accelerated sharply enough to warrant a bigger-than-usual rate hike. The yen's strength, which has weakened the economy's export competitiveness, has also reduced the need for aggressive monetary tightening. BOJ governor Kazuo Ueda reiterated that economic and price conditions are moving in line with projections, and the central bank is not yet at a point where a 50 basis point hike is warranted.",
  "summary": "Consensus view points to a conventional 25 bps increase to 1.25% next week; central bank has to convince markets it is not...",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}