5 May | Other

Bank of Japan expected to hold rates steady until next year — Reuters

Bank of Japan expected to hold rates steady until next year — Reuters

US tariffs narrow the possibilities for the Bank of Japan to hike rates. The import duties are expected to slow down Japan’s economic expansion and add to domestic price pressure, Reuters reports. 

According to Bank of Japan Governor Kazuo Ueda, it will take longer for core inflation to reach the 2% target. This signals a pause in rate hikes to get more detailed information on the impact of the tariffs imposed by the US administration, Reuters says. 

However, the Bank of Japan is likely to stick to its plan of increasing borrowing costs due to persistent food inflation, prospects for wage growth, and concerns about a weaker yen, the news agency notes.

Goldman Sachs projects the Bank of Japan will raise its rates in January 2026. The experts estimate the policy rate could eventually reach 1.5% in the monetary tightening cycle.

Morgan Stanley analysts expect borrowing costs to remain at 0.5% until the end of next year. Yet, the Bank of Japan might raise its rates in September if inflationary pressures intensify or the yen weakens sharply, experts say.

Period: 16.05.2025 Expectation: 600 pips
AUDUSD will resume growth to 0.64900
Today at 10:59 AM 41
Period: 24.05.2025 Expectation: 4240 pips
USDJPY could extend its rally toward target level of 150.30
Today at 08:56 AM 39
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segment "Currencies"
Period: 23.05.2025 Expectation: 45000 pips
ETHUSD pulls back ahead of new growth wave
Today at 08:54 AM 38
Period: 25.05.2025 Expectation: 156 pips
Selling natural gas with target of 3,300 amid lower demand due to mild weather
Today at 06:43 AM 28
Period: 15.05.2025 Expectation: 1150 pips
EURUSD is expected to decline to 1.10800
Yesterday at 11:04 AM 72
Period: 22.05.2025 Expectation: 2720 pips
USDCAD pair aims for recovery after local decline
Yesterday at 08:06 AM 44
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segment "Currencies"
Go to forecasts