Key facts
- Nearly 70% of economists expect the BOJ to raise its policy rate to 1.5% this quarter.
- About 80% of those specifying a month chose December for the rate hike.
- Nearly three-quarters of respondents said further dissenting votes could weigh on the yen.
- The government aims to keep new bond issuance at around 40 trillion yen for the fiscal 2027 budget.
A majority of economists surveyed by Reuters anticipate the Bank of Japan will raise its key interest rate to 1.50% in December, continuing a series of increases that began with a single hike a year ago. This move is supported by a period of yen stability and rising inflation pressures from energy costs and a weak yen. The poll, conducted from October 13-19, found that 70% of 78 economists expect the rate hike this quarter, with 80% of those specifying a month choosing December. Some economists believe delaying the hike could risk accelerating yen selling, especially with the US Federal Reserve and European Central Bank also expected to raise rates this year. However, some argue the economy is not overheating enough for consecutive hikes, and price developments are within the BOJ's expected range. Many BOJ officials reportedly prefer to wait for more data on the impact of previous increases.