Analysts Predict Further Rate Hikes by Bank of Japan
A survey conducted by the Japan Center for Economic Research (JCER) revealed that a majority of economists anticipate the Bank of Japan (BOJ) will raise short-term interest rates再次 in the second half of 2023.
Survey Findings:
* 30 out of 36 economists surveyed expect the BOJ to maintain interest rates at 0.5% in the first half of 2023.
* 28 economists forecast a rate hike to 0.75% in the latter half of the year.
* Six economists project a further increase to 1% during the same period.
Wage Hike Expectations:
The survey also indicated that Japanese firms are anticipated to offer wage hikes of 4.92% in the upcoming wage negotiations with unions. This is slightly lower than last year's 5.33% increase but higher than the previous forecast of 4.74%.
BOJ Monetary Policy Outlook:
The BOJ's recent interest rate hike to 0.5% from 0.25% suggests the central bank's confidence in Japan's progress towards achieving its 2% inflation target. Governor Kazuo Ueda has indicated a willingness to raise rates further if sustained wage growth supports the economy's inflation trajectory.
Neutral Rate Estimates:
While the BOJ estimates the nominal neutral rate to be between 1.0% and 2.5%, Governor Ueda has not specified a precise level. JCER's lead economist, Ikuko Samikawa, estimates the neutral rate to range from 1.2% to 2.8%, suggesting the BOJ may hike rates to at least 1%.