BOJ expected to raise interest rates again by end of the year - poll

§ 01 Executive Snapshot

• What: BOJ is expected to raise interest rates by the end of the year.
• Who: 87 economists surveyed regarding BOJ's monetary policy.
• Why it matters: The decision on interest rates will impact Japan's economy and currency stability amidst inflation concerns.

§ 02 Key Developments

• 83 of 87 economists expect BOJ to leave interest rates unchanged this quarter.
• 75 of 87 economists expect a 25 bps rate hike to 1.25% by end-December.
• 27 of 51 economists predict the rate hike will occur in December, while 18 expect a move in October.

§ 03 Strategic Context

• The survey reflects current economic sentiment amidst ongoing US-Iran developments and inflationary pressures in Japan.
• The weak Japanese yen is causing concerns about inflation, potentially influencing BOJ's rate hike decisions.

§ 04 Strategic Implications

• An interest rate increase could stabilize the yen and curb inflation, affecting both domestic and international financial markets.
• Timing of the rate hike (October vs. December) may depend on geopolitical factors, particularly in the Middle East.

§ 05 Risks & Constraints

• Potential regulatory or political pressures could affect BOJ's decision-making process.
• The ongoing geopolitical situation may introduce uncertainties that influence currency and economic stability.

§ 06 Watchlist / Forward Signals

• Watch for BOJ's announcements regarding interest rates in October and December to gauge market reactions.
• Monitor economic indicators and geopolitical developments that could impact the timing and magnitude of any rate hikes.