According to a survey, due to inflationary pressure, the Bank of Japan is likely to raise interest rates to 1.25% when the two-day meeting comes to an end on Friday. This rate hike means an acceleration of the austerity cycle, which is faster than the biannual rate hike that the Bank of Japan has followed since starting monetary policy normalization in March 2024. The last time the Bank of Japan raised interest rates was in June. About 89% of the economists surveyed expect the central bank to raise interest rates by 25 basis points for reasons including higher inflation, rising wages, and pressure from the US government. Affected by the Iran conflict, Japan's overall inflation rate reached 1.9% in July, the highest level in the year. In the same month, actual wages in Japan rose 2.4% year on year, achieving the seventh consecutive month of growth. Nobuhide Kiuchi, chief economist at the Nomura Research Institute and a former member of the Bank of Japan's policy committee, said, “The Trump administration has actually limited any potential action by the Takaichi Sanae administration to block the Bank of Japan's interest rate hike. As a result, the Bank of Japan has gained autonomous space to push for interest rate hikes.”

According to a survey, due to inflationary pressure, the Bank of Japan is likely to raise interest rates to 1.25% when the two-day meeting comes to an end on Friday. This rate hike means an acceleration of the austerity cycle, which is faster than the biannual rate hike that the Bank of Japan has followed since starting monetary policy normalization in March 2024. The last time the Bank of Japan raised interest rates was in June. About 89% of the economists surveyed expect the central bank to raise interest rates by 25 basis points for reasons including higher inflation, rising wages, and pressure from the US government. Affected by the Iran conflict, Japan's overall inflation rate reached 1.9% in July, the highest level in the year. In the same month, actual wages in Japan rose 2.4% year on year, achieving the seventh consecutive month of growth. Nobuhide Kiuchi, chief economist at the Nomura Research Institute and a former member of the Bank of Japan's policy committee, said, “The Trump administration has actually limited any potential action by the Takaichi Sanae administration to block the Bank of Japan's interest rate hike. As a result, the Bank of Japan has gained autonomous space to push for interest rate hikes.”