- BoJ is set to keep interest rates unchanged at the July meeting
- BoJ is likely to raise growth forecast for this year
- BoJ sees little need for back-to-back rate hikes
The Bank of Japan is expected to leave its policy interest rate unchanged at its July monetary policy meeting, according to a Kyodo News report citing people familiar with the matter. While policymakers are increasingly confident in the economy’s resilience, they are also expected to maintain a cautious approach to further policy tightening.
According to the report, the BoJ is likely to revise higher its economic growth forecast for the current fiscal year, reflecting stronger-than-expected domestic activity and a resilient labor market.
Policymakers see little need for back-to-back increases in borrowing costs after the central bank’s recent rate increase, preferring to wait and see how recent developments impact the economy before considering additional adjustments.
While Core CPI has remained above the central bank’s 2% target for an extended period and wage growth has improved, policymakers continue to emphasize the importance of achieving sustainable, demand-driven inflation rather than reacting to temporary price pressures. Traders are expecting the next rate hike to come in December.
This article was written by Giuseppe Dellamotta at investinglive.com.