Insider: The Bank of Japan may pledge to raise interest rates further at next week's policy meeting

PANews December 12 News, according to three sources, the Bank of Japan may maintain its commitment to continue raising interest rates next week but will emphasize that the pace of further hikes will depend on how the economy responds to each increase. Bank of Japan Governor Haruhiko Kuroda has essentially announced in advance that there will be a rate hike in December, and the market has almost fully priced in the possibility of raising rates from 0.5% to 0.75% in December. The market’s focus has shifted to how much the Bank of Japan can raise interest rates to a neutral level. The sources said that although the central bank might update its estimate of the policy interest rate relative to what is considered a neutral level internally, due to the difficulty in making precise forecasts, it will not use this estimate as the main communication tool for future rate hikes. Instead, the sources said, the BOJ will explain that future rate decision will be based on how past rate hikes have affected bank lending, corporate financing conditions, and other economic activities. One of the sources stated, “Japan’s real interest rates are very low, which allows the BOJ to continue raising rates in several stages,” and the other two sources shared the same view.