Summary
- SMBC Nikko Securities said the Bank of Japan may move ahead with an additional rate hike in October.
- The BOJ said production activity in Japan remained solid despite geopolitical tensions in the Middle East, and that there was still room for companies to raise prices further.
- The BOJ raised its benchmark rate by 25 basis points last month, taking it from 0.75% to 1% and back into the 1% range for the first time since 1995.
Forecast Trend Report by Period
SMBC Nikko Securities said the Bank of Japan may raise interest rates again in October.
Citing the outcome of a meeting of BOJ branch managers, SMBC Nikko economist Yoshimasa Maruyama said on July 9 that the central bank still appears to be on track for an additional rate hike in October, Odaily reported.
The recent branch managers' meeting found that production activity in Japan has remained solid despite geopolitical tensions in the Middle East. The BOJ also believes companies may still have room to implement further price increases.
"Overall, the outcome of this meeting can be seen as one step toward an additional rate hike," Maruyama said. He added that there was no urgency to raise rates immediately at the next monetary policy meeting.
Last month, the BOJ raised its benchmark rate by 25 basis points to 1% from 0.75%. Japan's policy rate returned to the 1% range for the first time since 1995.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul