Institution: Bank of Japan expected to see largest rate hike in 18 years

Odaily News The Bank of Japan is widely expected to raise its benchmark interest rate to 0.5% on Friday. A 25 basis point increase would be the biggest since February 2007 and further show that Japan's economy is finally returning to normal. The two key points that Bank of Japan Governor Kazuo Ueda outlined last month as a factor in considering a rate hike have largely cleared up, with wage gains looking strong so far and no major market shocks in the first days of U.S. President Donald Trump's second term.

People familiar with the matter said earlier that Bank of Japan officials believe that there is a high probability of a rate hike on Friday unless Trump creates too many negative surprises. Although Kazuo Ueda is unlikely to give any specific interest rate path to keep his options open, a statement that sounds too dovish could lead to a weaker yen and increase inflationary pressures. It may also make monetary authorities highly alert to the possible need for direct intervention in the market. (Jinshi)