Sources: Bank of Japan leans toward a 25 basis point rate hike this month, with future pace of hikes to remain flexible

Odaily Planet Daily News According to sources familiar with the matter, the Bank of Japan (BOJ) is leaning toward raising its benchmark interest rate by 25 basis points this month to address upside risks to inflation, while maintaining a flexible approach to the pace of future hikes based on economic and price conditions. The sources indicated that BOJ officials will discuss the possibility of raising the policy rate and continue to view inflation risks as tilted to the upside. Rising service prices and the continued weakness of the yen have further strengthened the case for action.

The sources noted that the current development of Japan's economy is broadly in line with the BOJ's earlier expectations. Given that there have been no major changes in economic conditions warranting a significant policy adjustment, the likelihood of a 50 basis point hike is considered low. One source said this has dampened market expectations for a "large rate hike." (Jinshi)