Friday, January 24 will be a big day in Japan economic news with the Bank of Japan’s interest rate policy decision due as well as the latest Consumer Price Index (CPI) for December and all of 2024 scheduled to be released the same day.
The below NHK World news spot discusses the 2025 outlook for the BOJ and just how much leeway there is for interest rates to move given inflation and uncertainty in the American economy.
NHK World doesn’t allow other sites to embed their YouTube videos on websites so click here to watch the full segment over on YouTube.
Key Takeaways:
Upcoming Economic Releases and Meetings:
Japan's Consumer Price Index (CPI) for December and all of 2024 will be announced on Friday.
The Bank of Japan (BOJ) concludes a two-day policy meeting on the same day.
The BOJ raised its short-term rate to 0.25% in 2024 after ending its negative interest rate policy.
Inflation and Economic Forecasts:
Japan's CPI has exceeded the 2% target since April 2022.
Economists expect the CPI (excluding fresh food) to remain above 2% throughout 2025, despite slower growth.
The BOJ aims to sustain inflation through higher wages and a positive price cycle.
Rate Hike Considerations:
Service sector inflation, particularly in April, will be a key factor for rate decisions.
Experts predict the BOJ could raise rates to 0.75% by July or September 2025, depending on wage increases and price adjustments by small and mid-sized firms.
Any January rate hike is unlikely to be followed by further increases until much later in the year.
