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2025-12-16 01:45:24
[Nomura: Tankan Survey Shows Japanese Companies Are Prepared for Central Bank Rate Hike] (1) Nomura FX strategists pointed out that the latest Tankan survey and Japan wage report indicate that there are no obstacles to the Bank of Japan raising interest rates later this week. The resilience of business performance, coupled with the outlook for the Consumer Price Index (CPI) over the next few years, has further strengthened market expectations for the Bank of Japan to raise interest rates by 25 basis points this Friday. According to swap market pricing, the probability of the Bank of Japan raising the policy rate to 0.75% this week is as high as 95%, and the market also expects the central bank to raise interest rates again in October 2026. (2) "Historically, Bank of Japan interest rate hikes have led to higher borrowing costs for companies, but in the current situation, companies generally believe that the tightening effect of such interest rate hikes has not reached the level of significantly impacting their business operations." This is how the Nomura strategist team, led by Yujiro Goto, stated in the report. They further added that in the latest survey results released that morning, the vast majority of the surveyed companies said that their current cash flow situation was "good". (3) Nomura believes that although the Bank of Japan is unlikely to make significant adjustments to its neutral interest rate forecast at this month’s policy meeting, it expects that the Bank of Japan “may continue to believe that the current real policy rate is still lower than the neutral interest rate level, and therefore the monetary policy stance will remain accommodative.”
