BOJ to project inflation will stay around target, signal chance for rate hike
TOKYO -The Bank of Japan is expected to project inflation will stay around its 2% target for the next three years in new forecasts due on Friday, signalling its readiness to raise interest rates again this year from current near-zero levels.
Having made a landmark exit from its radical stimulus just last month, the BOJ is widely expected to keep its short-term interest target unchanged in a range of 0-0.1% after a two-day meeting that ends on Friday. But the board may slightly raise its forecasts for inflation, as measured by an index excluding the effect of fresh food and fuel costs, to around 2% in fiscal 2024 and 2025 due to the prospect of sustained wage hikes, they said.
Markets are looking for clues on how soon the BOJ will hike rates again. Many economists expect it to happen either in the third or fourth quarter, after Ueda's recent comments signalling the chance of another hike around summer or autumn this year. The weak yen complicates the BOJ's policy path with some market players betting the central bank could come under pressure to hike rates sooner than it wants to slow the currency's decline.
Many analysts expect the BOJ to spend at least a few more months to gauge whether trend inflation will steadily accelerate toward its target, and durably stay there, as it projects.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
BoJ Minutes: Rising likelihood of hitting inflation targetThe Bank of Japan (BoJ) Board members shared their views on inflation and monetary policy outlook, per the BoJ Minutes of the January meeting.
Read more »
Tokyo inflation slowdown, output slide clouds BOJ's rate hike outlookTokyo inflation slowdown, output slide clouds BOJ's rate hike outlook
Read more »
BOJ Tankan to show Q1 manufacturers' optimism eased slightly, services improved: Reuters pollBOJ Tankan to show Q1 manufacturers' optimism eased slightly, services improved: Reuters poll
Read more »
Japan's money printing slows as BOJ moves away from radical stimulusJapan's money printing slows as BOJ moves away from radical stimulus
Read more »
BOJ's Ueda signals chance of rate hike if yen moves affect prices, Asahi reportsBOJ's Ueda signals chance of rate hike if yen moves affect prices, Asahi reports
Read more »
BOJ will scrutinise trend inflation in adjusting monetary support, says Gov UedaBOJ will scrutinise trend inflation in adjusting monetary support, says Gov Ueda
Read more »