BOJ to debate rate hike timing as Fed opens door to cuts
TOKYO - The Bank of Japan will detail plans to taper its huge bond buying and debate the timing of a next interest rate hike on Wednesday, signalling its resolve to steadily unwind a decade of massive monetary stimulus.
"The BOJ can move either way. If it wants to hike rates now, it can say consumption will rebound due to higher wages," said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute. The board will also debate whether to raise short-term rates from 0-0.1%, which could be a close call as policymakers remain split on how long they should scrutinise data before pulling the trigger.
Still, with inflation keeping real borrowing costs low, the BOJ will likely drop signs that it is on course for a steady rate hike path through 2026 to remove what it sees as excessive monetary support.
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