TOKYO — The Bank of Japan will raise its key interest rate by at least 25 basis points again later this year, according to nearly two-thirds of economists in a Reuters poll, up from just over half a month ago.
While news of recent weakness in the US job market has renewed bets for a Federal Reserve interest rate cut next month, 70 percent of analysts in the poll said that alone won’t delay the Japanese central bank’s push for slightly tighter monetary conditions.
Although the BOJ has been under pressure to raise rates after more than three years of consumer inflation exceeding its 2 percent target, it has been wary of doing so, partly due to concerns about US tariffs damaging economic growth.
In the August 12-19 poll, a 92 percent majority of economists, 67 of 73, forecast no change to interest rates at the BOJ’s next policy meeting in mid-September.
However, 63 percent, 45 of 71, expect the central bank to raise base borrowing costs to at least 0.75 percent from 0.50 percent next quarter, an increase from 54 percent in last month’s poll.
Of 40 economists who specified a month for when the BOJ will next hike rates, October was the top choice at 38 percent, followed by 30 percent for January next year and 18 percent this December.
“In October, the BOJ would be able to respond after assessing the direction of US monetary policy and political developments in Japan,” said Hiroshi Namioka, chief strategist at T&D Asset Management.
