Bank of Japan Signals Continued Interest Rate Hikes in 2025

BOJ officials and experts highlight the need for gradual rate increases to manage inflation and stabilize the yen.

BOJ board member Hajime Takata emphasized the importance of gradually raising interest rates to mitigate inflation risks and avoid financial overheating.
Former BOJ deputy governor Hiroshi Nakaso suggested the central bank could raise rates to 1% and possibly higher, depending on economic conditions.
Japan's inflation rate remains above the BOJ's 2% target, with corporate behavior and economic recovery supporting further rate hikes.
Former currency diplomat Hiroshi Watanabe predicted the BOJ might raise rates twice more this year, which could help stabilize the yen against the dollar.
Economists expect BOJ policy adjustments to narrow the interest rate gap with the U.S., addressing concerns over the weak yen and rising import costs.