BOJ to lift rates to 1.25% in September, target 1.75% by 2027
A poll shows the Bank of Japan will raise its policy rate to 1.25% on September 18 and aim for 1.75% in early 2027, faster than earlier forecasts.
According to a survey of 68 economists, virtually all expect the Bank of Japan to raise its policy rate to 1.25% on September 18, a shift from earlier expectations. A sizable minority also foresee a further hike to 1.50% later this year, while a majority project the rate will reach at least 1.75% by the second quarter of 2027, three months sooner than previously predicted. Over 80% of participants attribute the easing of political obstacles to a recent coordinated U.S.-Japan yen-buying intervention and remarks by Treasury Secretary Scott Bessent, who urged decisive action to curb yen weakness.
Bessent’s meeting with BOJ Governor Kazuo Ueda at a G20 gathering reinforced pressure for tighter monetary policy. Economists suggest that the Japanese government, now aligned with U.S. expectations, will find it difficult to oppose the BOJ’s rate-raising path, potentially affecting the bank’s perceived autonomy.
