Important points
- The Bank of Japan has hinted at the possibility of raising interest rates at its policy meeting in December.
- Officials have emphasized the importance of new economic and wage growth data, especially given the recent depreciation of the yen.
Sources with knowledge of the matter told Reuters that Bank of Japan officials have hinted at the possibility of raising interest rates at a policy meeting in December. The central bank appears to be preparing the market for a possible interest rate adjustment as policymakers weigh economic data and currency trends.
Governor Kazuo Ueda emphasized how a weaker yen could affect underlying inflation, and stressed the need for additional data on wage growth trends. The recent weakness in the yen reflects the Bank of Japan’s consideration of possible interest rate hikes to combat the effects of inflation.
Board member Junko Koeda points out the need for policy normalization in response to the recent depreciation of the yen, and hints at the possibility of an imminent interest rate hike. Bank of Japan officials are fine-tuning their messages to prepare markets for potential interest rate changes, focusing on decisions based on December data.
