15 May 2025 | Other

BOJ to hold off on rate hikes until September amid trade uncertainty — Reuters poll

BOJ to hold off on rate hikes until September amid trade uncertainty — Reuters poll

According to a Reuters survey, most economists (67%) don't expect the Bank of Japan (BOJ) to change its monetary policy until September amid tariff uncertainty. A slight majority (52%) think the interest rate will go up by at least 25 basis points by the end of the year.

The survey results align with the Bank of Japan's stance. It says US President Donald Trump's new import taxes have hindered but not completely derailed the regulator's plans to slightly tighten monetary conditions. Meanwhile, many other central banks around the world are leaning toward lowering borrowing costs, Reuters adds.

The latest median forecast for the BOJ rate at the end of September was 0.50%, up from 0.75% in an April survey. The expected rate at the end of December remained unchanged at 0.75%.

According to Takumi Tsunoda, senior economist at the Shinkin Research Institute, Japan's GDP growth and inflation will slow in the short term. However, the cycle of rising wages and prices is likely to continue.

Elena Berseneva MarketCheese
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