BOJ to Mull Raising Interest Rates to 0.25%
11:14 JST, July 31, 2024
Tokyo (Jiji Press)—Bank of Japan policymakers will consider a plan on Wednesday to raise short-term interest rates to some 0.25 pct from the current range of zero to 0.1 pct, people familiar with the matter told Jiji Press Tuesday.
BOJ officials are increasingly confident that inflation will move stably at levels around the central bank’s 2 pct goal, given that wage increases at major companies are spilling over into smaller firms and regional areas.
The BOJ ended its negative interest rate policy in March.
On Wednesday, the BOJ will also adopt a detailed plan for reducing its government bond purchases.
Possible options include cutting the monthly amount of the BOJ’s government bond purchases to some ¥3 trillion by the end of fiscal 2025 from about ¥6 trillion at present.
BOJ officials think that the Japanese economy is likely to avoid a recession thanks to higher wages and tax cuts though personal consumption is weak amid higher prices.
They also believe that the BOJ should raise interest rates out of concerns that a weaker yen could send prices for imported goods rising sharply.
Some BOJ officials, however, argue that the central bank should wait until inflation-adjusted wages move into plus territory.
BOJ policymakers will also discuss how an interest rate increase will affect the economy. A rate increase could weigh on consumer and business spending by sending interest rates on housing loans and lending to businesses higher.
In a quarterly economic and price outlook report that the BOJ is scheduled to release Wednesday, the central bank is expected to reiterate that inflation will move at levels around the 2 pct goal going into fiscal 2026.
"Business" POPULAR ARTICLE
-
G20 Sees Soft Landing for Global Economy; Leaders Pledge to Resist Protectionism as Trump Calls for Imported Goods Flat Tariff
-
Japan Business Circle Calls for China Resuming Visa-Free Travel; Keizai Doyukai Visit to Country Marks 1st in 8 Years
-
Call Centers Using AI to Address Customer Harassment: NTT and Fujitsu Develop Programs to Improve Employee Interactions, Reduce Turnover
-
Major Start-Up Support Center Station Ai Opens in Nagoya; ¥15.3 Bil. Facility Built to Bring Together Emerging Companies
-
Japan’s Sumitomo Mitsui Offers New Hires Sure Path to U.S., U.K. Branches, with 40% of Bank Revenue Already Coming from Abroad
JN ACCESS RANKING
- Streaming Services Boost Anime Popularity Overseas; Former ‘Geeky’ Interest More Beloved Among Gen Z than 3 Major U.S. Sports
- G20 Sees Soft Landing for Global Economy; Leaders Pledge to Resist Protectionism as Trump Calls for Imported Goods Flat Tariff
- 2024 POLLS: Ruling Camp Likely to Win Lower House Majority
- Chinese Social Media Still Full of Anti-Japanese Posts 1 Month After Boy’s Fatal Stabbing; Malicious Videos Gain Large Number of Views
- Chinese Rights Lawyer’s Wife Seeks Support in Japan; Sophie Luo Calls for Beijing to Free Ding Jiaxi, Xu Zhiyong