Japan’s central bank may raise its policy rate to 1.00% this week amid rising inflation and wage growth concerns.
The Bank of Japan is expected to increase its policy rate by 25 basis points to 1.00% at this week’s meeting, though uncertainty lingers over Governor Ueda’s health. Markets view the hike as the most likely outcome, but policymakers could delay due to risks surrounding the decision.
Inflation in Japan remains elevated, with core-core inflation already exceeding the BoJ’s 2.0% target. Stronger wage growth and fiscal support measures are adding upward pressure on prices, reinforcing the case for tighter monetary policy.
The decision follows a week of key economic releases, including U.S. retail sales, U.K. inflation data, and the FOMC meeting under new Fed Chair Kevin Warsh.