BOJ deputy governor flags chance of rate hike next week

BOJ deputy governor flags chance of rate hike next week


Shoppers in Tokyo, Japan, on Saturday, Sept. 16, 2022.

James Whitlow Delano | Bloomberg | Getty Images

The Bank of Japan will debate whether to raise interest rates next week, as prospects of sustained wage gains heighten and the U.S. policy outlook becomes clearer in President-elect Donald Trump’s inaugural address, Deputy Governor Ryozo Himino said.

In a speech to business leaders in the city of Yokohama, Himino said on Tuesday it would “not be normal” for real interest rates to remain negative once Japan had overcome shocks and factors that caused deflation.

Various surveys and reports from the central bank’s regional branches had heightened hopes that wage growth would remain strong this year, he said.

Himino also said the U.S. economy was likely to remain strong for the time being, and the “broad direction” of U.S. economic policy would likely become clear in Trump’s inaugural address on Jan. 20.

“The board will discuss whether to raise interest rates next week and reach a decision, based on the economic and price projections laid out in our quarterly outlook report,” he said.

30-year JGBs are a bit too cheap, this could be a good buying opportunity: Pinebridge

The remarks come ahead of the BOJ’s two-day policy meeting concluding on Jan. 24, when some analysts expect the bank to raise short-term rates from the current 0.25%. The board will also issue fresh quarterly growth and price forecasts that serve as the basis for setting monetary policy.

Himino’s views on wages and the U.S. policy outlook have been closely watched by markets, after Governor Kazuo Ueda cited uncertainty over the domestic wage outlook and Trump’s policies as reasons to hold off raising rates last month.

In a quarterly report analysing regional economies released last week, the BOJ said wage hikes were spreading to firms of all sizes and sectors, signalling that conditions for a near-term rate hike were continuing to fall into place.

Prospects of sustained wage gains and the increase in import costs due to a weak yen have heightened attention within the BOJ to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources have told Reuters.

The BOJ ended negative interest rates in March and raised its short-term rate target to 0.25% in July on the view Japan was on track to durably meet the bank’s 2% inflation target.

Ueda has signalled readiness to raise rates further if broadening wage hikes underpin consumption and allow companies to keep hiking prices not just for goods but services.



Source

Russia and UAE double down on trade, testing U.S. limits
World

Russia and UAE double down on trade, testing U.S. limits

Russia’s President Vladimir Putin shakes hands with United Arab Emirates’ President Sheikh Mohammed bin Zayed al-Nahyan during a meeting in Saint Petersburg, Russia, October 11, 2022. Pavel Bednyakov | Sputnik | via Reuters DUBAI, United Arab Emirates — United Arab Emirates President Mohammed bin Zayed al Nahyan traveled to Russia on Thursday for his second […]

Read More
CNBC’s Inside India newsletter: India’s oil options in a post-Russia world
World

CNBC’s Inside India newsletter: India’s oil options in a post-Russia world

This report is from this week’s CNBC’s “Inside India” newsletter. Like what you see? You can subscribe here. The big story If refineries are the oil industry’s children, India’s got plenty of mouths to feed — and U.S. tariff threats over Russian crude are imperiling a distinctly affordable meal ticket. This week, U.S. President Donald Trump […]

Read More
Intel shares drop after Trump calls for CEO to resign immediately
World

Intel shares drop after Trump calls for CEO to resign immediately

Intel’s CEO Lip-Bu Tan speaks at the company’s Annual Manufacturing Technology Conference in San Jose, California, U.S. April 29, 2025. Laure Andrillon | Reuters Intel shares were under pressure Thursday after President Donald Trump called for the chipmaker’s CEO to resign immediately. In a Truth Social post, Trump said Intel Chief Executive Lip-Bu Tan “is […]

Read More