Public opinion in Japan is predicting a high probability that the Bank of Japan (BoJ) will raise interest rates by 0.25% for the second time this year at its policy meeting next week. If this happens, it would be considered a historic decision by the BoJ in the past 35 years.
An increasing number of newspapers in Japan are forecasting that the central bank will likely raise its benchmark interest rate by 0.25% next week. If decided upon, the benchmark rate would rise to 0.75%, breaking the "0.5% barrier" that has been the upper limit of interest rates for the past 30 years.
According to Nikkei's analysis, if the Bank of Japan (BoJ) decides to raise interest rates next week, the total interest rate after two increases this year (2025) will be 0.5%, the highest level in 35 years. This once again underscores the emergence of a "period of rising interest rates" and will impact the market, especially the bond market, where long-term interest rates are rising significantly.
Bloomberg quoted Yasuya Ueno, President of Market Concierge, a company providing economic and financial market information, as saying that even if the policy interest rate is raised to 0.75%, this would still be considered an easing rate, given the concept of a "neutral rate" that the Bank of Japan (BoJ) estimates to be around 1-2.5%. The expert predicted, "the BoJ may want to raise interest rates to at least 1%."
The newspaper also explained the concept of "neutral interest rate" introduced by the BoJ, which is the natural interest rate plus the expected inflation rate. If the policy interest rate is lower than the neutral interest rate, it is still considered an accommodative monetary policy.
Reuters' Japanese edition interviewed Hiroyuki Seki, Executive Vice President of Mitsubishi UFJ Financial Group, who assessed that despite the Bank of Japan's interest rate hike being announced, the Yen remains weak at around 1 USD to 150 Yen. The possibility of the Yen continuing to weaken despite the interest rate increase remains, and there are still risks of price increases.
Although Governor Ueda commented on the possibility of raising interest rates earlier this month, the weak trend of the Yen has not changed significantly. This could prompt the Bank of Japan to decide to raise interest rates, in order to curb inflation that is weighing heavily on Japanese households.
Source: https://vtv.vn/nhat-ban-chuan-bi-dot-tang-lai-suat-lich-su-100251211102612425.htm
Comment (0)