Overview
- Some policymakers see scope to act as soon as April if evidence of durable 2% inflation builds and yen-driven cost pressures persist, according to Reuters sources.
- The central bank is expected to keep the policy rate at 0.75% at its Jan. 23 meeting as it assesses growth and price trends after December’s increase.
- Japan’s finance minister reiterated that currency intervention remains an option, helping the yen strengthen alongside talk of an earlier BOJ move.
- A Reuters poll shows most economists expect the next hike around July, with 76% forecasting the rate at 1% or higher by end-September and a median terminal rate of 1.5%.
- BOJ officials are likely to lift fiscal 2026 growth and inflation projections next week, while a dovish prime minister and a planned snap election complicate policy timing.