Summary
- Reuters reported that the Bank of Japan is likely to raise its policy rate to 1%% from 0.75%% at its monetary policy meeting.
- Reuters said a move to 1%% would put the policy rate at its highest level since 1995 and mark a turning point toward a more traditional central-bank role focused on inflation.
- In a Reuters poll, economists projected the Bank of Japan would raise rates to 1%% this month and then to 1.25%% in the fourth quarter.
Forecast Trend Report by Period
The Bank of Japan may lift its policy rate to the highest level in 31 years at next week's meeting, Reuters reported.
The BOJ is favored to raise its benchmark rate by 25 basis points, to 1% from 0.75%, at its monetary policy meeting ending June 16, Reuters said. A move to 1% would bring the rate to its highest level since 1995.
The meeting will take place without BOJ Governor Kazuo Ueda, who is currently hospitalized for two weeks because of a personal health condition.
Markets do not expect Ueda's absence to materially affect the decision. Saisuke Sakai, chief economist at Mizuho Research & Technologies, said the BOJ would focus more on inflation risks than on the threat of slower growth tied to the war in the Middle East.
A rate increase would be the BOJ's first since December last year. Reuters said the move would mark a turning point, shifting the central bank away from the gradual dismantling of former Governor Haruhiko Kuroda's massive easing program and toward a more traditional role centered on tackling inflation.
Investor attention is now turning to the pace of further increases. In a Reuters poll, economists projected the BOJ would raise rates to 1% this month and then to 1.25% in the fourth quarter.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
