BOJ Likely to Raise Policy Rate by 0.25 Point on Friday

Tokyo, Dec. 18 (Jiji Press)–The Bank of Japan is expected to raise its policy interest rate by 0.25 percentage point to a 30-year-high of 0.75 pct on Friday, its first increase since January. Policymakers at the central bank apparently think that companies will likely continue to raise wages at a solid pace next spring and that uncertainty over U.S. President Donald Trump’s trade policy has receded. The BOJ started a two-day policy meeting on Thursday. The central bank ended its negative interest rate policy and started raising interest rates in March 2024 because of improvements in economic and price conditions. The BOJ raised the policy rate to 0.5 pct in January this year and has since kept it unchanged for six consecutive meetings to assess the impact of U.S. tariffs. BOJ Governor Kazuo Ueda told a press conference after the previous policy meeting in October that he wanted to assess an initial momentum of wage talks before raising interest rates. Corporate profits have generally remained strong enough to raise wages. A BOJ survey has found that companies are expected to raise wages at a strong pace next spring as they did the previous year. END [Copyright The Jiji Press, Ltd.]