RSS Here's a view saying BoJ to hike today (or maybe January!) - stronger yen in months ahead

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 RSS Here's a view saying BoJ to hike today (or maybe January!) - stronger yen in months ahead

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MUFG analysts forecast the Bank of Japan (BoJ) will raise its policy rate by 25 basis points (bps), either at today's meeting or in January.

They project the BoJ will implement two additional hikes in 2025, bringing rates to 1.00%, aligning with the lower bound of the neutral rate range.

The Spring 2025 "Shunto" wage negotiations are expected to play a pivotal role, providing the necessary justification for the BoJ to continue monetary tightening as Japan's economic conditions evolve.

MUFG also anticipates a narrowing US-Japan yield spread and heightened volatility in global markets will contribute to a stronger yen in the months ahead, reinforcing Japan’s shift toward a more balanced monetary policy.

This outlook highlights the BoJ's growing focus on addressing inflationary pressures and labor market dynamics while navigating a delicate policy normalization process.

Most expectations are for the Bank of Japan to remain on hold today:

This article was written by Eamonn Sheridan at www.forexlive.com.
 
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