BOJ Likely to Slow Pace of Rate Increases Next Year

Dow Jones
Sep 18

0441 GMT - The Bank of Japan will likely slow its pace of rate increases next year after accelerating the pace temporarily in response to inflation concerns fueled by higher crude oil prices, Crédit Agricole says in a note. A faster rate increase driven by external factors, at a time when domestic demand remains weak, is expected to weigh on economic expansion, the French bank says. Weaker GDP growth and potentially lower oil prices should stabilize inflation, leading to slower policy tightening from 2027, at a pace of one rate increase roughly every six months, the bank says. The government led by Prime Minister Sanae Takaichi is likely to tolerate gradual rate increases, accompanied by strong expansion of investments, Crédit Agricole says.

 

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