BoJ to raise rates to 1.25% this month — Reuters poll

A Reuters poll showed the Bank of Japan (BoJ) will hike interest rates to 1.25% at its September policy meeting and then to 1.75% in the second quarter (Q2) of 2027, earlier than previously expected, amid persistent concerns over broadening price pressures and Japanese Yen (JPY) weakness.

82% of economists said the joint US-Japan Yen-buying intervention to stem the JPY's ‌slide to 40-year lows and remarks by Treasury Secretary Scott Bessent on BoJ policy had “significantly” or “somewhat” lowered political barriers for rate hikes.

September 1-8 survey showed all but two of 68 economists expected the BoJ to raise rates on September 18, up from 57% in a previous poll. More than one-third, 24 of 66 economists, anticipated the Japanese central bank would follow with another hike to 1.50% in either October or December, roughly double the share in August.

Beyond this year, 89% of analysts, 57 ‌of 64, see the policy rate reaching at least 1.50% by the end of March next year, up from 65% last month. Around 62% saw the interest rate reaching at least 1.75% by the end of Q2 2027, three months earlier than predicted in August's poll.

Market reaction

At the time of writing, the USD/JPY pair is up 0.05% on the day at 153.60.