Still remember the last time Japan raised interest rates? Will this time copy the previous one???
Sources: Some Bank of Japan officials believe there is room for an earlier rate hike
According to sources, some Bank of Japan policymakers believe the possibility of an earlier rate hike is higher than market expectations, with a high likelihood of a rate increase in April, as the ongoing depreciation of the yen may exacerbate already growing inflation pressures. Bank of Japan policymakers face a difficult task: raising borrowing costs that have remained extremely low for years amid worsening global headwinds and growth pressures, while Japan's economy is just beginning to recover from the long-term deflationary impact. The central bank recently raised rates to a 30-year high in December and is expected to keep rates unchanged at its January meeting. However, sources say many Bank of Japan policymakers believe there is room for further rate hikes, with some not ruling out the possibility of action in April, which would come earlier than the mainstream market expectation (that rate hikes will occur later this year). Sources indicate that if sufficient evidence emerges showing Japan is consistently achieving its 2% inflation target, some within the Bank of Japan may not rule out taking early action.
Sources: Some Bank of Japan officials believe there is room for an earlier rate hike
According to sources, some Bank of Japan policymakers believe the possibility of an earlier rate hike is higher than market expectations, with a high likelihood of a rate increase in April, as the ongoing depreciation of the yen may exacerbate already growing inflation pressures. Bank of Japan policymakers face a difficult task: raising borrowing costs that have remained extremely low for years amid worsening global headwinds and growth pressures, while Japan's economy is just beginning to recover from the long-term deflationary impact. The central bank recently raised rates to a 30-year high in December and is expected to keep rates unchanged at its January meeting. However, sources say many Bank of Japan policymakers believe there is room for further rate hikes, with some not ruling out the possibility of action in April, which would come earlier than the mainstream market expectation (that rate hikes will occur later this year). Sources indicate that if sufficient evidence emerges showing Japan is consistently achieving its 2% inflation target, some within the Bank of Japan may not rule out taking early action.