Live Updates > Live Update Details
2025-12-18 15:20:15
[Bank of Japan Expected to Raise Rates This Week; Market Focuses on Subsequent Policy Path] 1. The market widely expects the Bank of Japan to raise its short-term policy rate from 0.5% to 0.75% on Friday. This rate hike expectation is mainly based on the current high food costs driving overall inflation to remain above the central bank's 2% policy target. 2. Japanese Prime Minister Sanae Takaichi stated on Wednesday that Japan needs to take proactive fiscal spending measures to promote economic growth and increase tax revenue. 3. Vincent Chung, a fixed income portfolio manager at T. Rowe Price in Hong Kong, pointed out that the Bank of Japan may raise interest rates twice in 2026 to cope with the persistent negative real interest rate environment. He stated, "There is a view in the market that the Bank of Japan may not release hawkish signals in its policy guidance, leading to a temporary weakening of the yen. However, we believe that this effect will be short-lived."
