Two or three rate increases are expected in 2025 from the Bank of Japan, possibly taking the benchmark to 1% for the first time in three decades.
“There seems to be a widespread view that the BOJ raising rates two more times this year wouldn’t be considered monetary-policy tightening given the current level of interest rates,” said Tsuyoshi Ueno, a senior economist at NLI Research Institute. “While maintaining its free hand and monitoring economic conditions, I think the BOJ is contemplating two rate increases.”
Possible spanners in the works are many. They include unexpected movements in the yen and U.S. economic policy under Donald Trump once he becomes president on Jan. 20. Central bank officials continue to suggest that they are in no hurry to make a move higher given the uncertainty in the world, especially in the United States.
