BOJ seen hiking by quarter point to new three-decade high: CNBC survey
A CNBC survey indicates that the Bank of Japan is likely to raise interest rates to 1.25% during its upcoming meeting. The potential hike is driven by inflationary pressures, rising wages, and pressure from the U.S. government to strengthen the yen.
Why it matters
A shift in Japanese monetary policy could have significant implications for global financial markets, particularly regarding Treasury yields and currency stability.
The Bank of Japan is likely to raise rates to 1.25% at the end of its two-day meeting on Friday amid inflationary pressures, according to a CNBC survey.
A hike would signal an acceleration of the tightening cycle, faster than the six-month interval the Bank has been following since it started policy normalization in March 2024. The BOJ last raised rates in June.
Around 89% of respondents said they expect the BOJ to hike by 25 basis points, citing higher inflation, higher wages, and pressure from the U.S. government.
Japan's headline inflation rate for July hit its highest this year, at 1.9%, due to increased energy costs from the Iran war. In the same month, real wages rose 2.4%, rising for the seventh month in a row.
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