The Bank of Japan is likely to raise interest rates in December
According to Odaily, three sources in the Japanese government indicated that the Bank of Japan is likely to raise interest rates in December, a step that the government is expected to tolerate. The central bank appears ready to increase the policy rate from 0.5% to 0.75%, as noted by Governor Kazuo Ueda in a speech on Monday. This will be the first rate hike since January of this year. One source stated, "If the Bank of Japan wants to raise rates this month, they should decide on their own. This is the government's position." The source added that a rate hike this month is virtually certain. Ueda mentioned on Monday that the central bank will weigh the "pros and cons" of raising rates this month, indicating a high probability of an increase during the meeting on December 18-19. These remarks have led the market to price in an 80% probability of a rate hike in December, although some market participants are watching how the peaceful government of Prime Minister Sanae Takaiichi may respond. Market attention may focus on the central bank's language regarding the extent to which rates will ultimately be raised, a topic on which Ueda remains uncertain.$BNB
