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BoJ rate hike expectations rise for September, Reuters poll shows

A Reuters survey found 57% of economists expect the BoJ to lift its policy rate in September, up from a July poll, with views also shifting toward higher peak rates by 2027.

Reported · Written up by our desk · Central Banks

A Reuters poll covering August 17-24 showed economists are more likely to expect Japan’s central bank to raise rates in September. The survey found 57% of economists anticipate a hike in September, compared with a sharper drop in the July poll.

Among analysts, 10 of 58 respondents expected the BoJ to follow an initial hike with another increase to 1.50% in either October or December. Nearly two-thirds of analysts, 35 of 54, also projected the policy rate would reach at least 1.5% by end-March next year.

The poll also pointed to a faster path toward higher rates. Around 60% of respondents expected the policy rate to reach at least 1.75% by end-Q3 2027, and the share picking “2% or above” rose to 36% from 23% in July, with half of those answering an extra question seeing 1.75% as a terminal rate.

The Bank of Japan sets monetary policy to support price stability, targeting inflation around 2%, and it has been retreating from ultra-loose settings after lifting rates in March 2024. The outlet notes prior ultra-stimulus periods contributed to yen weakness through widening policy differentials with other central banks, a dynamic that partly reversed in 2024 after the BoJ abandoned its ultra-loose stance.

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