BOJ Likely to Speed up Rate Hikes to Address Yen, Inflation
Dow Jones
6 hours ago
0719 GMT - The Bank of Japan is expected to raise its policy rate in September and December this year and again in April 2027 to reach 1.75%, says Oxford Economics economist Shigeto Nagai. That is a higher policy rate projection and a faster pace than his previous forecast, which called for two hikes in December and June 2027. "We think the BOJ will want to address the pressure on the yen and the rise in inflation expectations," says Nagai, a former BOJ official. Still, as the policy rate is unlikely to reach the market-implied terminal rate of slightly above 2%, the 10-year Japanese government bond yield is forecast at 3%, he adds. The 10-year JGB yield is last up 1.5 bps at 2.940%.
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