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The Bank of Japan is expected to gradually increase interest rates, supported by a projected rise in wages to 3.0% this year, up from 2.8% in 2024. Goldman Sachs anticipates that if wage growth aligns with these estimates, the BOJ will likely raise rates to 0.75% by July, maintaining a steady approach thereafter.
The Bank of Japan is expected to gradually increase interest rates, supported by a projected rise in wages to 3.0% this year, which aligns with maintaining inflation around the 2% target. Goldman Sachs anticipates a rate hike to 0.75% in July, with further increases occurring approximately twice a year. Wage growth exceeding expectations could accelerate rate hikes, while slower growth may delay them.
The Bank of Japan is expected to gradually increase interest rates, supported by a projected rise in wages to 3.0% this year, up from 2.8% in 2024. Goldman Sachs anticipates that if wage growth aligns with these estimates, the BOJ will likely raise rates to 0.75% by July, maintaining a steady pace of hikes thereafter.
Goldman Sachs economists assert that Japan's wages must rise by at least 3% over the next two years to meet the Bank of Japan's sustainable inflation target. They project nominal wage growth of 3%-3.1% in 2025 and 3.3%-3.4% in 2026, emphasizing the need for stronger pay growth to foster a virtuous cycle of rising incomes and prices. The BOJ is expected to maintain its benchmark interest rate amid global economic uncertainties, with potential rate hikes anticipated in the summer.
The Bank of Japan is expected to raise interest rates in December or January, maintaining a focus on normalizing monetary policy despite recent political challenges. Governor Kazuo Ueda indicated that easing risks in the U.S. economy could create favorable conditions for a hike, while the yen's fluctuations and domestic fiscal developments will heavily influence timing. Analysts predict that the upcoming supplementary budget, aimed at economic aid, will be crucial in determining the BOJ's next steps.
Akira Otani
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bank of japan expected to gradually raise interest rates amid wage growth
10:51 18.03.2025
bank of japan expected to gradually raise interest rates amid wage growth
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bank of japan expected to gradually raise interest rates amid wage growth
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bank of japan poised for rate hike amid economic and political shifts
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The Goldman Sachs Group, Inc.
Capital Economics Ltd.
Moody's Analytics Inc.
JPN
Stefan Angrick
Akira Otani
Marcel Thieliant
Kazuo Ueda
Shigeru Ishiba
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07:37 01.11.2024
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