SOME Bank of Japan (BOJ) policymakers saw conditions falling into place for an imminent rate hike with one predicting a move “in the near future”, a summary of opinions at the bank’s December meeting showed, keeping alive the chance of a January hike.
The BOJ kept interest rates steady at 0.25 per cent at this month’s meeting, a move governor Kazuo Ueda explained as aimed at scrutinising more data on next year’s wage momentum and clarity on the incoming US administration’s economic policies.
“There are high uncertainties over the course of discussions on tax and fiscal policy in Japan and over the policy stance of the new US administration taking office at the beginning of 2025,” one member was quoted as saying in the summary in calling for keeping policy steady at the Dec 18 to 19 meeting.
Another opinion also voiced concern over still-weak profitability of smaller firms in Japan and high uncertainty over the overseas economy, the summary showed on Friday.
But others signalled that conditions for raising interest rates were falling into place.
While stressing the need to monitor uncertainty over the US economy for now, one member said the BOJ “will likely decide to raise the policy interest rate in the near future”, the summary showed.
“While there remain uncertainties regarding overseas economies, Japan’s economy is in a state where the degree of monetary accommodation can be adjusted,” another opinion showed.
The BOJ ended negative interest rates in March and raised its short-term policy target to 0.25 per cent in July. It has signalled a readiness to hike again if wages and prices move as projected.
All respondents in a Reuters poll taken earlier this month expected the BOJ to raise rates to 0.5 per cent by end-March. The BOJ next meets for a policy review on Jan 23 to 24. REUTERS
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