Bank of Japan near certainty for 1.25% rate hike next week
Investors anticipate the Bank of Japan will raise its policy rate to 1.25% at a meeting next week as revised GDP and wage data confirm strong economic growth.
Japanese equity markets showed mixed performance on Tuesday as investors weighed strong domestic indicators against a strengthening yen. Revised Gross Domestic Product data indicated faster expansion in the second quarter than initially estimated. Real wages grew 2.4% in July, marking the largest increase since May 2021 and signaling improved household purchasing power. These figures reinforce market expectations that the Bank of Japan will raise its policy rate to 1.25% at its meeting next week. A firmer yen reached 153.37 per dollar, its highest level since February, putting pressure on exporters by reducing the value of overseas earnings when converted back into yen. The benchmark Nikkei 225 rose 0.31% to 66,608.42 in early trading, while the broader Topix index fell 0.51% to 4,104.89.
