According to a recent Reuters survey conducted in early December, the majority of economists expect the Bank of Japan to increase interest rates by 25 basis points at its upcoming December meeting, raising the rate to 0.75 percent. This would mark the first rate hike since January, driven primarily by rising inflation and the depreciation of the yen. The government of Prime Minister Sanae Takaichi is anticipated to accept this decision in light of current economic conditions. Out of 70 economists surveyed, 63 predicted the central bank would raise the short-term interest rate from the current 0.50 percent to 0.75 percent, a significant increase in expectations compared to last month’s survey, where only 53 percent foresaw such a hike.
Furthermore, nearly two-thirds of 54 surveyed economists believe that by the end of September next year, the interest rate will reach at least 1.00 percent, reflecting growing concerns about inflation and currency depreciation. The Bank of Japan has long aimed to maintain positive interest rates to stabilize the domestic economy, but recent global and domestic economic pressures have highlighted the need for policy adjustment. This potential rate increase is expected to be significant for investors and financial markets, as it may affect borrowing costs and investment trends. Additionally, a higher interest rate could help stabilize the yen, which has weakened in recent days. This development could represent a pivotal moment for Japan’s economy and may have repercussions across global financial markets.
Source: binance
