JPMorgan's Economic and Policy Research department has suggested in a report that the Bank of Japan (BOJ) might raise interest rates earlier than anticipated by 2025. The report highlights Japan's strong income growth and a potential new trend of yen depreciation as factors that could push the BOJ's inflation trajectory higher.
According to JPMorgan, it predicts that the BOJ will increase interest rates by 25 basis points in December of this year. Further rate hikes are anticipated in April and October 2025, which is earlier than their previous expectations of rate hikes in June and December.
The report also suggests that the BOJ might continue normalizing interest rates into 2026, aiming to lower rates to 1.5% by the end of that year.
