Survey shows: Economists have different opinions on the timing of the next rate hike by the Bank of Japan
Economists have different views on the timing of the next rate hike by the Bank of Japan. A survey shows that 31% of economists expect the rate hike to take place at the end of July or early August policy meeting, while 41% of respondents expect the rate hike to occur in October. Slightly more than 20% of people believe that the rate hike will have to wait until 2025. Moody's Analytics has postponed the rate hike expectation from July to September, as they believe there is a possibility of a rate hike in September
According to the Zhitong Finance and Economics APP, a recent Reuters survey shows that there is still a divergence of views among economists on the timing of the next interest rate hike by the Bank of Japan after the central bank decided to announce a quantitative tightening plan next month.
The Bank of Japan stated last Friday that it will begin reducing the size of its bond purchases and will announce detailed plans to reduce its balance sheet by nearly $500 billion in July. The Bank of Japan will maintain its policy rate target at 0%-0.1%.
Among the 29 economists surveyed, 31% expect the Bank of Japan to raise interest rates at the next policy meeting on July 30th to 31st.
Another 41% of respondents expect the next rate hike to occur in October. The survey shows that slightly more than 20% of people believe there will be a rate hike in September, while the remaining respondents expect it to happen in 2025.
The results are broadly consistent with the regular monthly survey conducted before the Bank of Japan's policy meeting last week.
Yoshimasa Maruyama, Chief Market Economist at Sumitomo Mitsui Banking Corporation, said on Monday that although the Bank of Japan may raise interest rates in July, the "considerable obstacles" to raising rates while reducing bond purchases make it more likely that the next rate hike will occur in October.
Stefan Angrick, Senior Economist at Moody's Analytics, said, "The Bank of Japan hopes to focus on reducing bond purchases at the next meeting." Moody's Analytics has pushed back its expectations for a rate hike by the Bank of Japan from July to September.
He added that a rate hike in September is "possible" as key data, including GDP figures for the months of April to June, will be released, which are crucial for the Bank of Japan's decision-making