Reasonable to Expect BOJ to Raise Rates Once Every Three Months Until Neutral Level
Dow Jones
Sep 18
0423 GMT - The Bank of Japan could be reasonably expected to raise its rates roughly once every three months moving forward, as underlying inflation approaches 2%, says EFG International's Sam Jochim in a commentary. He reckons the next rate move will be an increase, and the tightening cycle will continue until rates reach a level the Japanese central bank deems neutral. He notes the BOJ has estimated this neutral level to be a terminal policy rate of around 1.75%-2.00%, likely happening in 2027. However, the economist flags that any signs of slowing growth could act as a headwind to accelerated rate hikes.
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