BY SATOSHI SUGIYAMA
TOKYO- The Bank of Japan will hike interest rates only once more this year, most likely during the third quarter to 0.75 percent, according to a majority of economists in a Reuters poll published on Thursday.
The survey also showed analysts’ median prediction for the rate of pay increases in wage talks this year is 5 percent, close to last year’s 33-year-high, an encouraging sign for the BOJ to continue raising interest rates.
It would leave the BOJ as a rare global outlier pushing for higher rates, albeit from a very low level, even as other major central banks cut rates to shore up their economies as concerns mount over US President Donald Trump’s tariff policies.
All 61 economists in the February 12-18 poll expected borrowing costs to remain unchanged in the March 18-19 meeting and only a small minority, 19 of 61, saw at least one 25-basis-point hike to 0.75 percent next quarter.
Over 65 percent of respondents, 38 of 58, predicted a rate hike to 0.75 percent in July or September.
“It will be necessary (for the BOJ) to confirm the rate of pay rises in this year’s wage talks and the extent to which they have spread to small and medium-sized firms, as well as to examine the January interest rate hike’s impact,” said Junki Iwahashi, senior economist at Sumitomo Mitsui Trust Bank.
In a smaller sample of 39 analysts who predicted a hike for a specific month, 59 percent, or 23, picked July. Another 15 percent, six, chose June while five each selected April and September.
The median prediction for the end-year rate was 0.75 percent and end-March 2026 was 1.00 percent, the poll showed.
