BlockBeats news: On April 16, according to a Reuters survey, nearly two-thirds of economists predict the Bank of Japan will raise its benchmark interest rate to 1% by the end of June. Amid uncertainty caused by the war in Iran, the market views the likelihood of an interest rate hike this month as roughly equal to that of a hike in June.
Economists still generally expect the Bank of Japan to tighten policy again this quarter, a view that has remained largely unchanged since the U.S. and Israel went to war with Iran on February 28. If anything, this conflict has heightened market concerns about rising energy prices, renewed inflationary pressures, and further yen depreciation, thereby strengthening hawkish expectations for rate hikes.
In a survey conducted from April 7–14, 46 out of 71 economists (65%) predicted that the policy rate would rise to 1% by the end of June, up from 60% in the March survey and 58% in February. Among the 40 economists who provided specific timing estimates, 38% chose April and 35% chose June. In last month’s survey, the highest share supported a rate hike in June at 32%, followed by July at 30% and April at 27%.
Looking beyond June, the median forecast indicates that the Bank of Japan will raise borrowing costs to 1.25% in the fourth quarter, slightly earlier than previously expected. The median forecast also shows the Bank of Japan will further hike rates by 25 basis points to 1.50% in the third quarter of 2027, with rates held steady through year-end, though a few institutions anticipate a rise to 1.75%. (Jinshi)