The Bank of Japan (BOJ) increased its policy rate by 25 basis points to 0.5%, marking its highest level since 2008. The decision was driven by the BOJ's aim to normalize its monetary policy. A majority of economists anticipated this hike. One BOJ member dissented, advocating for policy changes only after confirming an increase in firms' earning power. Senior BOJ officials, including Governor Kazuo Ueda and Deputy Governor Ryozo Himino, signaled their intention to raise rates. The BOJ is closely monitoring the 'shunto' wage negotiations and anticipates strong wage hikes in the 2025 fiscal year. Analysts predict a series of gradual hikes, potentially reaching 1% by year-end.
The Bank of Japan hiked rates by 25 basis points Friday to 0.5%, bringing its policy rate to its highest level since 2008, as it seeks to normalize its monetary policy.overwhelming majority of economists predict a hike.
The BOJ will be watching closely the"shunto" wage negotiations, and hopes to see"strong wage hikes" in the 2025 fiscal year, Himino said in a speech to business leaders on Jan. 14. In a note on Jan. 21, Vincent Chung, co-portfolio manager for diversified income bond strategy at T. Rowe Price, said that moving forward, a rate increase will be followed by"a series of gradual hikes, potentially bringing the policy rate to 1% by the end of the year."
BANK OF JAPAN MONETARY POLICY INTEREST RATE HIKES JAPANESE ECONOMY YEN
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