0345 GMT - The Bank of Japan is likely to raise interest rates to 0.75% from the current 0.5% in 1Q of 2026 after it confirms momentum for the next year's wage talks, say economists at SMBC Nikko Securities. "The bank would consider additional rate hikes after confirming that the Japanese economy is on a sufficient wage increase trajectory and on track to achieve the 2% inflation target, even after tariffs are imposed," the economists say in a research note. Friday's data showed Japan's economy shrank in 1Q for the first time in a year. "As the bank isn't rushing interest-rate hikes, the economic contraction in the January-March quarter may not be of great significance," they add. The economists expect the BOJ to raise its policy rate to 1.0% in the 3Q of 2026. (megumi.fujikawa@wsj.com)

(END) Dow Jones Newswires

May 15, 2025 23:45 ET (03:45 GMT)

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