Bank of Japan set to raise rates to 1.25% in September, reaching 1.75% by early 2027
A Reuters poll indicates the Bank of Japan will increase interest rates faster than previously forecast due to U.S.-Japan cooperation on currency intervention.
On September 18, the Bank of Japan will raise its policy rate to 1.25 per cent. The central bank plans to move this figure to 1.75 per cent in the second quarter of 2027, a timeline earlier than prior projections suggested. A Reuters survey of experts reveals over 80 per cent believe U.S.-Japan yen-buying intervention and comments by Treasury Secretary Scott Bessent have reduced political obstacles to these hikes. Bessent urged Governor Kazuo Ueda to pursue decisive monetary action to curb yen weakness and stabilize inflation expectations. Some analysts argue that persistent price pressures and government fiscal accommodation previously constrained the bank's ability to normalize rates.
