Half of Economists Still See BOJ Waiting Until December to Hike

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessHalf of Economists Still See BOJ Waiting Until December to HikeHalf of surveyed economists still expect the Bank of Japan to wait until December to bump its benchmark interest rate higher, with Prime Minister Sanae Takaichi’s government seen as a key obstacle to further action, according to a Bloomberg survey.Author of the article:Toru Fujioka and Cynthia Li You can save this article by registering for free here. Or sign-in if you have an account.96xvqw5ow69qac4j5z8r(rgz_media_dl_1.png Bloomberg survey of 52 BOJ watch(Bloomberg) — Half of surveyed economists still expect the Bank of Japan to wait until December to bump its benchmark interest rate higher, with Prime Minister Sanae Takaichi’s government seen as a key obstacle to further action, according to a Bloomberg survey.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountSome 50% of 52 economists selected December as the most likely timing for the next move after the BOJ raised the rate last month, according to the poll. Another 40% said it would come in October.Takaichi is known to support monetary easing, and her government’s influence will be a deterrence for the board to proceed along the path toward policy normalization, according to 59% of the respondents. An overwhelming majority — 82% — forecast the pace of rate hikes to be roughly once every six months, an increase from 71% in a June survey.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe survey shows economists remain less confident about the BOJ’s ability to hike than market participants, who were pricing in an 83% probability of a move by October as of Thursday morning. According to people familiar in a report published after the survey closed, the board is open to raising interest rates at a faster pace than the consensus among the economists, as the weak yen adds to upside inflation risks.Click here to read the full results of the survey.The government has tried to play down perceptions it is seeking to influence the central bank. In an annual economic policy guideline earlier this week the government referred to its commitment to respecting the BOJ’s autonomy. That added reference came after an earlier draft helped send yields on benchmark 10-year government bonds to the highest in three decades by fueling concerns over a delay in normalization.Even so, many economists remain unconvinced. About two-thirds of respondents said they didn’t believe that the changes to the guideline mean the government will refrain from attempting to influencing the central bank’s independence.“The bar is high for an early additional rate hike because of the gap between the BOJ and the government over the pace of interest-rate increases,” said Tsuyoshi Ueno, chief economist at NLI Research Institute.The BOJ raised borrowing costs to 1% on June 16 without any clear signal from the government opposing the action. Some 65% of the BOJ watchers said that the weakening of the yen compelled Takaichi to accept the hike. The yen slid past 163 per dollar earlier this week for the first time since 1986 after flaring tensions in the US-Iran conflict spurred oil prices higher. A weak yen adds to inflationary pressures as Japan imports virtually all of its energy and well over half its food.With the currency continuing to slump amid persistent uncertainty over the direction of oil prices, many economists aren’t ruling out an early rate hike. When asked about the earliest possible timing for a policy shift, some 37% chose September, up from 23% in a survey following the June meeting.“Upside risks to inflation remain elevated, with the yen’s depreciation adding to price pressures,” said Kento Minami, an economist at Daiwa Securities. “The BOJ is shifting the focus of its rate decisions toward managing upside inflation risks, making an additional hike increasingly likely to come sooner than previously expected.”A key focus of the meeting will be updated quarterly economic projections. The median economist prediction suggests a slight downgrade of inflation forecast for this year to 2.6% from 2.8% while the economic growth projection will be upgraded to 0.7%.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.