Bank of Japan likely to delay rate hike until early 2026 — Reuters

According to economists surveyed by Reuters, the Bank of Japan (BOJ) is expected to hold off on further monetary tightening this year due to uncertainty surrounding Donald Trump’s trade policies. Analysts predict the next interest rate hike, likely a 25-basis-point increase, may not occur until the first quarter of 2026.

The BOJ is still being cautious about its borrowing costs. In addition to these shifts, the regulator plans to reduce the amount of government bonds it buys more slowly starting in April. Some economists believe the number of ultra-long public securities to be issued by the Japanese bank might also go down.

Despite global trends toward rate cuts, BOJ Governor Kazuo Ueda is open to further tightening, but only if core inflation stabilizes near the bank’s 2% target.

Takumi Tsunoda from Shinkin Central Bank's Research Institute emphasized that breakthroughs in America's trade talks with key economic partners may serve as a catalyst for worldwide business activity, with Japan positioned to see faster GDP growth as a result.