Economists expect BoJ rate hike by December as weak yen fuels inflation fears

A Reuters poll shows a majority of economists now forecast the Bank of Japan will raise interest rates again by year-end, with some pointing to October, as currency weakness reignites inflation concerns.

By Handelsavisen Newsroom · Automated 2026-07-23 04:12 UTC · 1 min read

The Bank of Japan is widely expected to raise its benchmark interest rate again before the end of December, with a growing number of economists forecasting a move as early as October.

A Reuters poll of economists indicates a clear consensus that the central bank will continue its tightening cycle, driven by persistent pressure on the yen and rising inflation risks.

The shift in expectations reflects growing concern that the yen’s weakness is feeding into domestic price pressures, complicating the BoJ’s mandate.

Market participants have been closely watching for signals that policymakers are willing to accelerate the pace of normalization, particularly as underlying economic resilience supports a more aggressive stance.

This development marks a significant evolution in the BoJ’s policy trajectory, which has been characterized by gradualism in recent years.

The prospect of an earlier-than-expected hike could have immediate implications for Japanese government bond yields and the broader Asian currency complex, as traders adjust their positioning ahead of the next policy meeting.